Canada’s highest court recognises Aboriginal Title – implications for Canada’s resource sector

November 2014  |  SPECIAL REPORT: ENERGY & NATURAL RESOURCES SECTOR

Financier Worldwide Magazine

November 2014 Issue

November 2014 Issue


This summer, the Supreme Court of Canada (SCC) issued a landmark declaration that the Tsilhqot’in Nation, one of hundreds of indigenous groups in Canada with unresolved land claims, has title to over 1700 square kilometres of Crown land in central British Columbia. While the SCC had recognised the concept of Aboriginal title decades earlier, this is the first time that the SCC has confirmed Aboriginal title exists over a particular tract of land. Previous claims of Aboriginal title in Canada had failed to meet the SCC’s stringent test (i.e., demonstrate that the Aboriginal community’s occupation of the lands prior to sovereignty was sufficient, continuous to current times and exclusive). By demonstrating that the Tsilhqot’in Nation’s semi-nomadic ancestors had hunted, fished and gathered on the lands prior to sovereignty to the exclusion of others and that the Tsilhqot’in Nation continues to use the lands today, the Tsilhqot’in Nation had their right to control such lands assured through a declaration of Aboriginal title. Simply put, the SCC described such Aboriginal title as the right to the benefits associated with the land – to use it, enjoy it and profit from its economic development (although the SCC did not address the specific issue of whether Aboriginal title includes ownership of mineral rights).

Consent of Aboriginal title holder

The Tsilhqot’in decision confirms the government’s duty to consult and accommodate Aboriginal interests on such Aboriginal title lands and goes further to explain that any development on Aboriginal title lands would be subject to the consent of the Aboriginal title holder. Absent such consent, the government can only infringe proven Aboriginal title by meeting the established test in Canada for justification. Such use may only be justified on the basis of the broader public good under Canada’s Constitution Act, 1982, including demonstrating a compelling and substantial objective consistent with the government’s fiduciary obligation to the Aboriginal group.

Interestingly, it is the Canadian government’s view that the SCC’s “justification” or balancing approach between Aboriginal and non-Aboriginal interests differs from the concept of “free, prior and informed consent” contemplated in the UN Declaration on the Rights of Indigenous Peoples, which the Canadian government interprets as potentially including a “veto” for Aboriginal groups. The Canadian government’s approach to Aboriginal rights is generally more consistent with the approach taken by the International Council on Mining and Metals’ Council, which acknowledged the right of states to make decisions on developing resources and recognised that in most countries, no groups, whether indigenous or otherwise, have the absolute right to veto resource projects.

Regional implications

The impact of the Tsilhqot’in decision will be most significant in the parts of Canada where First Nations have not signed treaties, such as in British Columbia and parts of Quebec. In these areas, First Nations are already starting to assert or clarify claims for Aboriginal title rights over larger territories in accordance with the criteria for recognition of Aboriginal title set out in the Tsilhqot’in decision. It is expected that the Tsilhqot’in decision will encourage both the federal and provincial governments to enter into comprehensive land claim agreements to resolve Aboriginal title disputes.

However, even on treaty lands in Canada (where First Nations generally surrendered any rights in lands other than a reserve and certain traditional harvesting rights), a recent SCC decision involving the Grassy Narrows First Nation confirms that government power is not unconditional. For example, where a province intends to take up treaty lands for the purposes of a resource project, the province must consult regarding the impact that the proposed resource project will have on the First Nations as they exercise their treaty rights to hunt, fish and trap. The government must then deal with the First Nation in good faith, and with the intention of substantially addressing their concerns. While not every taking up by government will constitute an infringement of the treaty rights (and result in a requirement to accommodate the Aboriginal group), if the taking up leaves the First Nation with no meaningful ability to hunt, fish or trap on traditional territories, potential actions for treaty infringement and failure to accommodate will arise.

The path for proponents

From a practical perspective, particularly with respect to a proposed resource project on lands subject to a strong case for Aboriginal title, these SCC decisions will provide industry with further incentive to actively engage First Nations in an effort to obtain consent. However, the SCC decisions will not likely have a notable impact on current industry practice in Canada’s resource sector as industry already routinely enters into cooperation or other forms of benefit agreements in exchange for First Nation consent regarding a proposed project. Consent provides greater certainty for future operations than more limited forms of accommodation. As such, these benefit agreements have emerged as an important (albeit imperfect) mechanism to achieve Aboriginal reconciliation in Canada. While such consent is sometimes difficult to obtain for controversial resource projects (such as current pipeline projects in Canada), industry generally pursues consensus-building and benefit-sharing to enhance project certainty.

However, what will likely be given more attention by industry is the statement by the SCC in the Tsilhqot’in decision that the use of Aboriginal title lands must ensure that such development does not deprive future Aboriginal generations of the control and benefit of the lands. We can expect that the possible exhaustion of particular resources and the footprint of proposed developments will be given significant scrutiny in the negotiation of future cooperation agreements. Further, industry will no doubt consider the consent language in future cooperation agreements to confirm such language is adequate to constitute consent in the Aboriginal title context.

 

Sarah Powell is a partner at Davies Ward Phillips & Vineberg LLP. She can be contacted on +1 (416) 367 6931 or by email: spowell@dwpv.com.

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