Duty to Consult Is Not a Veto

Energy projects in Canada are of enormous public interest, with significant economic, social, and environmental affects. The National Energy Board Act allowed for the National Energy Board to provide a report for the certification of a pipeline, with recommendations to the Governor in Council, while considering the following relevant factors:

  • (a) the availability of oil, gas or any other commodity to the pipeline;

  • (b) the existence of markets, actual or potential;

  • (c) the economic feasibility of the pipeline;

  • (d) the financial responsibility and financial structure of the applicant, the methods of financing the pipeline and the extent to which Canadians will have an opportunity to participate in the financing, engineering and construction of the pipeline; and

  • (e) any public interest that in the Board’s opinion may be affected by the issuance of the certificate or the dismissal of the application.

The Act also allows for an environmental assessment under the Canadian Environmental Assessment through the Canadian Environmental Assessment Agency, and claims for compensation from an “Aboriginal governing body,” which is defined as a band under subsection 2(1) of the Indian Act, or other First Nations and Aboriginal peoples or organizations that may have land claims, treaties, or other relevant agreements.

The passage of Bill C-69, which received Royal Assent on June 21, 2019, repeals and replaces the National Energy Board Act and Canadian Environmental Assessment with the Canadian Energy Regulator Act, creating a different adjudicative function for the new Canadian Energy Regulator (CER). The CER will have a different mandate than the National Energy Board, which will not include impact assessments or consultations on major projects. Instead, these functions will be carried out by the Impact Assessment Agency of Canada (IAAC) under the new Impact Assessment Act, which will be the central agency for impact assessments and consultations.

One of the main functions of the CER is found in s. 31 of the Act,

Expeditious applications and proceedings

(3) All applications and proceedings before the Commission must be dealt with as expeditiously as the circumstances and procedural fairness and natural justice permit, but, in any case, within any time limit provided for under this Act.

Delays of major energy projects, due to regulatory and legal challenges, often cost the private sector and the public purse millions of dollars. A such, projects requiring an assessment under the Impact Assessment Act will have shortened timelines, while those not requiring an impact assessment would be reviewed within 300 days instead of 450 days.

Existing applications before the National Energy Board still continue under the older regime, and what might be one of the last decisions under this framework has given rise to some important observations by the Federal Court of Appeal in Coldwater First Nation v. Canada, concerning a complex application for a proposed expansion of the Trans Mountain pipeline.

The Federal Court of Appeal had previously upheld portions of a legal challenge to this pipeline, in Tsleil-Waututh Nation v. Canada. This application contained a number of difficult issues, including “Indigenous rights and concerns, pipeline integrity, the fate and behaviours of spilled hydrocarbons in aquatic environments, emergency prevention, preparedness and response, the need for the Project and its economic feasibility and the effects of Project-related shipping activities.”

The court found the approval deficient due to too narrow an environmental assessment, overlooking section 79 of the Species at Risk Act in the context of marine shipping, and a failure by the government to properly consult with Indigenous peoples,

[494] The consultation process does not dictate a particular substantive outcome. Thus, the consultation process does not give Indigenous groups a veto over what can be done with land pending final proof of their claim. What is required is a process of balancing interests—a process of give and take. Nor does consultation equate to a duty to agree; rather, what is required is a commitment to a meaningful process of consultation (Haida Nation, paragraphs 42, 48 and 62).

[495] Good faith consultation may reveal a duty to accommodate. Where there is a strong prima facie case establishing the claim and the consequence of proposed conduct may adversely affect the claim in a significant way, the honour of the Crown may require steps to avoid irreparable harm or to minimize the effects of infringement (Haida Nation, paragraph 47).

[496] Good faith is required on both sides in the consultative process: “The common thread on the Crown’s part must be ‘the intention of substantially addressing [Aboriginal] concerns’ as they are raised […] through a meaningful process of consultation” (Haida Nation, paragraph 42). The “controlling question in all situations is what is required to maintain the honour of the Crown and to effect reconciliation between the Crown and the Aboriginal peoples with respect to the interests at stake” (Haida Nation, paragraph 45).


[497] At the same time, Indigenous claimants must not frustrate the Crown’s reasonable good faith attempts, nor should they take unreasonable positions to thwart the government from making decisions or acting in cases where, despite meaningful consultation, agreement is not reached (Haida Nation, paragraph 42).

Based on section 53 of the National Energy Board Act, the government directed the Board to conduct a reconsideration in relation to these factors, which resulted in some modifications to the project, and further consultations with Indigenous peoples. The modified project, which included changes directly in response to consultations, was ultimately approved.

In Raincoast Conservation Foundation v. Canada, the court approved twelve motions for leave for judicial review for this project, which is authorized under s. 55(2)(c) of the National Energy Board Act. Although the settled practice of the court is not go give reasons on leave motions, the strong public interest and unique circumstances of the case,

[12] Parliament’s purpose is plain: a project is not to be hamstrung by multiple, unnecessary, long forays through the judicial system. Any recourse to the judicial system must be necessary and as short as possible.

[13] Thus, the leave requirement is not just a cursory checkpoint on the road to judicial review. It is more like a thorough customs inspection at the border.

Despite the need for expediency, the court heard dissatisfaction from Indigenous groups about the poor quality and hurried nature of the consultations, which met the threshold described in Lukács v. Swoop Inc. as a follows,

[19]…The requirement of a “fairly arguable case” on a motion for leave to appeal should be construed in this way. The body of evidence placed before the Court on a leave motion may not be enough or of sufficient weight to guarantee success on the ultimate merits, but it should be enough and of a sufficient quality to persuade the Court that the investigation, assessment and scrutiny that takes place in a court review is warranted.

This judicial review, decided in Coldwater, conclusively described the practical exigencies around the matter,

[56] This litigation concerns the adequacy of a consultation process that involved many individuals on both sides. A strict requirement of first-hand evidence from everyone involved would require all sides to prepare and file many additional affidavits, perhaps tens of them or more, with attendant cross-examinations. As a result, litigation concerning the duty to consult could take years and be extraordinarily expensive.

[57] This matters to both sides. On the one side, the inevitable delay could cause proponents and their investors to withdraw support for the project, ending it. In effect, the mere bringing of a challenge, with the inevitability of intolerable delay, functions as a veto of the project, something that the duty to consult is not intended to do: see Raincoast Conservation Foundation v. Canada (Attorney General)2019 FCA 224 at paras. 22 and 47 and cases cited therein. On the other side, Indigenous peoples and First Nations, forced to have multitudes swear first-hand affidavits and make themselves available for cross-examination perhaps for days on end, will suffer crippling costs and disruption. As a result, some may not have the ability to litigate.

[58] I agree with the submission of the Trans Mountain respondents that “[i]n a highly expedited judicial review proceeding, it would be absurd to require that an organization the size of [Trans Mountain] (or the Government of Canada) provide direct evidence from each and every individual who has communicated with [Indigenous peoples and First Nations] and/or been involved in meetings, telephone calls and written correspondence.”

[emphasis added]

The court employed the new Supreme Court of Canada decision in Vavilov, which required a standard of correctness when dealing with treaty rights,

[55] Questions regarding the division of powers between Parliament and the provinces, the relationship between the legislature and the other branches of the state, the scope of Aboriginal and treaty rights under s. 35 of the Constitution Act, 1982, and other constitutional matters require a final and determinate answer from the courts. Therefore, the standard of correctness must continue to be applied in reviewing such questions: Dunsmuir, para. 58Westcoast Energy Inc. v. Canada (National Energy Board)1998 CanLII 813 (SCC)[1998] 1 S.C.R. 322.

The court defined the judicial review as excluding the scope of the duty to consult under the Constitution Act, and as such, the standard used was one of reasonableness,

[16] The existence and depth of the duty to consult are not in issue. All parties agree that the duty was one of deep consultation. The fundamental issue to be decided is whether taking this into account, the Governor in Council could reasonably conclude that the flaws identified in TWN 2018 were adequately remedied by the renewed consultation process. This is a narrow issue primarily based on the Governor in Council’s evaluation of the adequacy of the consultation that took place during the second consultation process, an assessment that is fact-intensive and that calls for deference.

However, this reasoning appears rather flimsy. Even with the existence and depth of a duty being acknowledged, the arguments raised by Indigenous groups was very much one of scope and adequacy.

The Court in Vavilov also indicated at para. 17 that the presumption of a reasonableness standard could be rebutted where the rule of law requires a standard of correctness. These circumstances include constitutional questions, and general questions of law of central importance to the legal system as a whole. The constitutional dimensions of this judicial review could only be excluded by removing any scope questions from consideration, and the latter concept appears to be used sparingly by courts as a self-serving catch-all for matters which they choose to be important to them.

The court also cited statutory constrained in para. 37 to their review by the legislative provisions in s. 54 of the National Energy Board Act. Although Vavilov describes these types of limits at paras. 111-114, but these are not the types of statutory schemes which would necessarily constrain the scope of a judicial review.

The challenges that emerged in the decade following Dunsmuir were not necessarily with the decision itself, but more in how courts subsequently applied and interpreted it, often in disparate ways. The challenges with Vavilov may ultimately prove to be of the same character.

Where the review would be more informed by a legal source is through the common law, and the interpretations of these same provisions in numerous cases, which is also envisioned in these same passages in Vavilov. The court cited a number of helpful cases to illustrate what reasonable and meaningful consultation was necessary to satisfy the duty to consult,

[41] So what do the words “reasonable” and “meaningful” mean in this context? The case law is replete with indicia, such as consultation being more than “blowing off steam” (Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage)2005 SCC 69, [2005] 3 S.C.R. 388, para. 54 [Mikisew 2005]), the Crown possessing a state of open-mindedness about accommodation (Gitxaala Nation, para. 233), the Crown exercising “good faith” (Haida Nation, para. 41Clyde River, paras. 23-24Chippewas of the Thames, para. 44), the existence of two-way dialogue (Gitxaala Nation, para. 279), the process being more than “a process for exchanging and discussing information” (TWN 2018, paras. 500-502), the conducting of “dialogue […] that leads to a demonstrably serious consideration of accommodation” (TWN 2018, para. 501) and the Crown “grappl[ing] with the real concerns of the Indigenous applicants so as to explore possible accommodation of those concerns” (TWN 2018, para. 6). In cases like this where deep consultation is required, the Supreme Court has suggested the following non-binding indicia (Chippewas of the Thames, para. 47; Haida Nation, para. 44Squamish First Nation, para. 36; see also Yellowknives Dene First Nation, para. 66):

  • the opportunity to make submissions for consideration;

  • formal participation in the decision-making process;

  • provision of written reasons to show that Indigenous concerns were considered and to reveal the impact they had on the decision; and

  • dispute resolution procedures like mediation or administrative regimes with impartial decision-makers.

While properly noting that these examples are nothing more than indicators, and emphasizing that depending on the case satisfying this duty will vary, by employing these concepts and evaluating the content of the duty, the court has effectively engaged in a scope exercise while denying it is doing so.

Despite some of the clumsy wording and reasoning by the court here, their outcome was still likely the right one, given the numerous and competing interests here. The duty to consult cannot act as a veto, from a strictly practical perspective. The new legislative schemes will have to employ these principles, and ensure they occur in an expeditious manner, for future energy projects that impact Indigenous rights.

The new Canadian Energy Regulator Act will remove the ability of the government to overturn a negative decision by CER, but retains the right to ask for a reconsideration, and eliminates the National Energy Board’s standing test to broaden the views from the public on projects. These changes effectively downloads some of these responsibilities from the government to the regulator, and the separation also serves other practical purposes. The court was not blind to the need to improve relationships with Indigenous peoples, and emphasized this in the Coldwater decision,

[48] Reconciliation must nonetheless begin by looking back and developing a deep understanding of the centuries of neglect and disrespect toward Indigenous peoples, well-summarized in a number of reports and studies (see, e.g., Royal Commission on Aboriginal Peoples, Report of the Royal Commission on Aboriginal Peoples (Ottawa: The Commission, 1996); Truth and Reconciliation Commission, Honouring the truth, reconciling for the future: summary of the final report of the Truth and Reconciliation Commission of Canada (Winnipeg: The Commission, 2015)). Too often decisions affecting Indigenous peoples have been made without regard for their interests, dignity, membership and belonging in Canadian society, with terrible neglect and damage to their lives, communities, cultures and ways of life. Worse, almost always no effort was made to receive their views and try to accommodate them—quite the opposite. The duty to consult is aimed at helping to reverse that historical wrong.

[49] Reconciliation also looks forward. It is meant to be transformative, to create conditions going forward that will prevent recurrence of harm and dysfunctionality but also to promote a constructive relationship, to create a new attitude where Indigenous peoples and all others work together to advance our joint welfare with mutual respect and understanding, always recognizing that while majorities will sometimes prevail and sometimes not, concerns must always be taken on board, considered and rejected only after informed reflection and for good reason. This is a recognition that in the end, we all must live together and get along in a free and democratic society of mutual respect.
[51] The process of meaningful consultation can result in various forms of accommodation. But the failure to accommodate in any particular way, including by way of abandoning the Project, does not necessarily mean that there has been no meaningful consultation.
[56] Reconciliation as relationship can only be advanced through consultation when the respective parties commit to the process, avoid counterproductive tactics, get to the substance of the issues of concern and exercise good faith—Indigenous peoples by communicating their concerns in the clearest possible way and the Crown by listening to, understanding and considering the Indigenous peoples’ points with genuine concern and an open mind throughout. Only then can the process lead to accommodations that respond to the concerns of the Indigenous peoples.

Allegations of conflict of interest and bias were raised by Indigenous groups, as the government acquired corporate interests in Trans Mountain after their first approval decision. The court distinguished between the Governor in Council and the Government of Canada, but placing these functions with the CER may assist the government in maintaining and repairing relationships with Indigenous communities.

These changes through the Canadian Energy Regulator Act also subject the regulator to judicial review by the federal court. The manner in which courts give effect to this statutory appeal mechanism post-Vavilov, and handle the constitutional dimensions and impact on the legal system, remains to be seen, especially given that the new Act explicitly mentions these same constitutional provisions.

The Canadian Energy Regulator Act states that CER will prepare a report that takes into consideration a broad range of factors,

(2) The Commission must make its recommendation taking into account — in light of, among other things, any Indigenous knowledge that has been provided to the Commission and scientific information and data — all considerations that appear to it to be relevant and directly related to the pipeline, including

  • (a) the environmental effects, including any cumulative environmental effects;

  • (b) the safety and security of persons and the protection of property and the environment;

  • (c) the health, social and economic effects, including with respect to the intersection of sex and gender with other identity factors;

  • (d) the interests and concerns of the Indigenous peoples of Canada, including with respect to their current use of lands and resources for traditional purposes;

  • (e) the effects on the rights of the Indigenous peoples of Canada recognized and affirmed by section 35 of the Constitution Act, 1982;

  • (f) the availability of oil, gas or any other commodity to the pipeline;

  • (g) the existence of actual or potential markets;

  • (h) the economic feasibility of the pipeline;

  • (i) the financial resources, financial responsibility and financial structure of the applicant, the methods of financing the pipeline and the extent to which Canadians will have an opportunity to participate in the financing, engineering and construction of the pipeline;

  • (j) the extent to which the effects of the pipeline hinder or contribute to the Government of Canada’s ability to meet its environmental obligations and its commitments in respect of climate change;

  • (k) any relevant assessment referred to in section 9293 or 95 of the Impact Assessment Act; and

  • (l) any public interest that the Commission considers may be affected by the issuance of the certificate or the dismissal of the application.

[emphasis added]

One of the greatest challenges that the new CER will have is in considering these factors, especially those relating to Indigenous concerns, while still maintaining the mandate to fulfill their statutory obligations in an expeditious manner, especially since the statutory timelines are balanced with procedural fairness considerations and natural justice principles.

Nobody said reconciliation would be easy. They certainly didn’t think that it could be put on a timeline.


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