On October 28, 2010, the Supreme Court of Canada released its unanimous decision in Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council¹ and held that the British Columbia Utilities Commission ("BCUC") had the authority to consider whether adequate Crown consultation with aboriginal peoples occurred in connection with its review of whether an electricity purchase agreement ("EPA") was in the public interest.

This is the fourth decision from the Court to address Crown consultation obligations to aboriginal peoples. The decision is important for its treatment of what triggers the duty to consult and the need for a direct causal relationship between the potential for an adverse effect on an aboriginal interest and a given government decision or action. It also provides guidance to tribunals, and those who appear before them, as to the Court’s views of the appropriate role for such tribunals in dealing with the Crown’s duty to consult aboriginal peoples.

Background

In the 1950s B.C. authorized the construction of the Kenney Dam for the production of hydro power for the smelting of aluminum by Alcan (now Rio Tinto Alcan). The Carrier Sekani First Nations, represented by its tribal council in the case ("CSTC"), assert aboriginal rights and title in the area and claim that their rights have been adversely affected by the dam. This case arose from a desire by BC Hydro to purchase the excess power generated by the dam from Rio Tinto Alcan through the EPA. CSTC claimed that they were not consulted originally regarding the construction of the dam and that the EPA was subject to consultation.

BCUC and BC Court of Appeal Decisions

The BCUC held that the EPA would have no physical impact on existing water levels in the Nechako River and would not change the current management of the fishery. The BCUC concluded that the EPA would have no new adverse impact on the claims or rights of the CSTC First Nations and, as a result, that it did not need to reconsider its decision to exclude a review of the adequacy of Crown consultation from its scoping order in respect of the matter.²

The B.C. Court of Appeal overturned the BCUC’s decision and held that the BCUC needed to reconsider the evidence and argument on whether the Crown’s duty to consult is triggered and whether that duty had been met regarding the EPA.

The Decision

The Court affirmed the BCUC’s decision regarding the EPA and held that the BCUC reasonably considered and addressed the issue of consultation in its proceedings.

The Court reaffirmed its general approach set out in Haida Nation v. B.C.³ that the duty to consult arises "when the Crown has knowledge, real or constructive, of the potential existence of the Aboriginal right or title and contemplates conduct that might adversely affect it."⁴ The Court confirmed that the duty to consult has a legal and constitutional character.⁵ The Court stated that the Crown’s failure to consult can lead to a variety of remedies including injunctive relief, an order to carry our additional consultation, and damages. While the Court cites Haida as authority for this proposition, Haida did not expressly discuss "damages" as a potential remedy for a failure by the Crown to consult in respect of the potential impacts on asserted and unproven rights.⁶

The Court also confirmed that government action triggering the duty to consult is not limited to the exercise of statutory powers and extends to "strategic, higher level decisions" that may have an impact on aboriginal claims and rights, including the transfer of tree farm licences, the approval of a multi-year forest management plan over a large geographic area, the establishment of a review process for a major gas pipeline, and a comprehensive inquiry to determine a province’s infrastructure and capacity needs for electricity transmission. McLachlin C.J. stated that the Court would leave the issue of whether "government conduct" for the purposes of consultation also applies to legislative action for another day.⁷

On the issue of what constitutes an "adverse effect" for the purpose of triggering the duty to consult, the Court stated that the claimant:

must show a causal relationship between the proposed government conduct or decision and a potential for adverse impacts on pending claims or rights. Past wrongs, including breaches of the duty to consult, do not suffice.⁸

The Court went on to say that speculative impacts and impacts on future negotiating positions will not trigger the duty.⁹ A past or continuing breach of a claim or right, including prior failures to consult, will only trigger a duty to consult if the present decision at issue causes a new adverse effect.¹⁰

The Court stated that regulatory tribunals that address issues that touch on aboriginal interests may have the Crown’s duty to consult delegated to them, or may have their power limited to determining whether adequate consultation has taken place, or finally have none of these powers. Tribunals must be expressly or implicitly empowered to consult or consider whether consultation that had occurred has been adequate.¹¹ If the tribunal structure set up by the legislature is incapable of dealing with a decision’s potential adverse impacts on aboriginal interests, then the aboriginal peoples potentially impacted must seek the appropriate remedies in the courts.¹² The legislation empowering the tribunal will need to be reviewed carefully to determine whether and to what extent a tribunal can address the issue of consultation.

In this case, the Court concluded that the BCUC has the constitutional jurisdiction to consider the adequacy of Crown consultation in regard to matters that are properly before it, but the Utilities Commission Act did not empower the BCUC itself to engage in consultations in order to discharge the duty.¹³ The Court confirmed that BC Hydro, as a Crown corporation, held the Crown’s duty to consult — it was acting in the place of the Crown.¹⁴ The BCUC acted reasonably and correctly held that the EPA did not have the potential to adversely affect the claims or rights of the CSTC First Nations.¹⁵

Discussion

The Court’s clarification regarding the need for a direct causal relationship between the potential for an adverse effect and the government decision or action at issue is significant and will likely have a direct impact on how all parties involved in consultation approach the issue. An ancillary effect, although not expressly stated, may also be to limit the ability of aboriginal peoples to argue that the cumulative effects of projects in a particular area need also be considered as part of consultation given that drawing a direct causal relationship between potential cumulative effects (regarding unknown future events or projects) will be challenging.

Equally important is the Court’s rejection of consultation being appropriate for past events or decisions that may adversely affect aboriginal interests, including the lack of past consultation. The Court confirmed that consultation must be focused on the action or decision at hand and not focused on past events. The Court stated that ‘other remedies’ are available to aboriginal peoples for such past events, although the Court did not expressly provide guidance on the nature of the specific cause of action that would be required to remedy such past wrongs.

The Court made several references to compensation and damages being an appropriate remedy in cases where the Crown did not consult. While the Court cites Haida as authority for this proposition, nowhere in Haida did the Court discuss damages or compensation as an appropriate remedy for breach of the duty to consult regarding unproven or asserted rights. Up until Rio Tinto, the issue of compensation for breaches of section 35 generally has been focused around infringements of established aboriginal or treaty rights. It remains unclear whether the Court intended to apply compensation to consultation regarding unproven rights and, if so, would such compensation be related to the infringement of an unproven right or would it be limited to the fact that consultation had not occurred? In either case, this raises the question of how damages to unproven rights would be established and why an aboriginal group would ever need to establish an aboriginal right in the first place if compensation is payable simply upon not be consulted. Finally, the Court did not set out the nature of the cause of action to pursue the compensation remedy.

Regarding the issue of the role of tribunals, the Court has taken the view that tribunals must be expressly or implicitly empowered to consider whether consultation has occurred and to conduct consultation in a given instance. The Court appeared not to provide any support for the proposition that tribunals’ publicly available hearing processes, by themselves, are a form of consultation — notwithstanding that many tribunals across Canada have relied on such hearing processes as, at minimum, assisting the Crown in carrying out its duty. Notably, while the Court acknowledges the concern that governments may effectively avoid their duty to consult by limiting a tribunal’s statutory mandate through legislation, it references Haida for the proposition that in such cases aboriginal peoples must seek appropriate remedies in the courts.¹⁶ It is not clear, however, on what basis aboriginal peoples would seek a remedy in the courts, whether simply on the basis of infringement of a proven aboriginal right (imposing a high burden on the affected aboriginal people) or on the basis of some other cause of action. If the latter, the Court’s deferral of the issue of whether "government conduct" for the purposes of consultation also applies to legislative action may become particularly relevant. Finally, it is interesting to note that the decision appears to support the somewhat surprising conclusion that the Crown’s duty to consult would not be triggered in cases where the BCUC was asked to consider an application by a private proponent (rather than a Crown corporation).

The conclusions concerning tribunals will likely raise significant issues for governments and industry proponents across Canada as they attempt to establish whether a given tribunal has the concomitant authority and jurisdiction to decide questions relating to consultation and/or actually carry out consultation. In any event, it will likely result in governments and tribunals reviewing all of their existing statutes to determine what, if any, regulatory or consultation vacuums need to be filled. This issue also raises serious issues of whether other Crown actors have the legislative authority to bind regulatory tribunals who do not have the authority to carry out consultation but are being guided by other governmental actors regarding consultation and accommodation issues generally. This will likely be an important issue to monitor in the coming years.

Finally, for Crown corporations across Canada, Rio Tinto appears to stand for the proposition that such corporation will hold the duty to consult notwithstanding that they may also be a project proponent seeking approval from another government agency (for example, BC Hydro seeking the approval of the BCUC regarding the EPA).

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¹ 2010 SCC 43 ("Rio Tinto").

² Ibid, para. 16.

³ [2004] 3 S.C.R. 511 ("Haida").

⁴ Ibid, para.35; cited in Rio Tinto at para. 31.

⁵ Rio Tinto, supra note 1 at para. 34.

⁶ Ibid, paras. 37, 49, 54; citing Haida, at paras. 13 -14.

⁷ Ibid, paras. 43, 44.

⁸ Ibid, para.45.

⁹ Ibid, paras. 46, 50.

¹⁰ Ibid, para. 49.

¹¹ Ibid, paras. 58, 60.

¹² Ibid, para. 63.

¹³ Ibid, paras. 72, 74.

¹⁴ Ibid, para. 81.

¹⁵ Ibid, para. 93.

¹⁶ Ibid, paras. 62, 63.