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Court and Tribunal Decisions – Canada
Supreme Court of British Columbia (Tysoe J)
30 December 2004
Aboriginal rights and title — duty to consult and accommodate Aboriginal peoples — whether duty to consult and accommodate is continuing — assessment of the adequacy of attempts at consultation and accommodation
In 2002, a number of First Nations (including the Gitanyow First Nation) challenged the decision of the Minister of Forests (‘Minister’) to consent to the change of control of Skeena Cellulose Inc (‘Skeena’) from its previous owners to NWBC Timber & Pulp Ltd (‘NWBC’). The Province of British Columbia (‘Province’) was part owner of Skeena. In Gitxsan and other First Nations v British Columbia (Minster of Forests), 2002 BCSC 1701 (‘Initial Reasons’), Tysoe J held that the First Nations had a good prima facie claim of Aboriginal title and a strong prima facie claim to Aboriginal rights over at least part of the areas included within the lands covered by Skeena’s tree farm and forest licences. The Minister’s duty of consultation and accommodation had not been satisfied before the consent to the change in control, but the decision was not quashed in order to permit the duty to be fulfilled.
Following the Initial Reasons, the Province and the Gitanyow First Nation continued to negotiate a Memorandum of Understanding on Recognition and Consultation but did not reach agreement. One unresolved issue concerned the exclusion of Buffalo Head Resources Ltd (‘Buffalo Head’) (a subsidiary of Skeena) from the transfer to NWBC due to accrued silviculture obligations attached to the Buffalo Head licence. The shares of Buffalo Head were transferred to a company owned by the Crown, and later to Timber Baron Contracting Ltd (‘Timber Baron’).
The Province also sought to negotiate a Forest and Range Agreement. The Agreement proposed revenue sharing and access to forest tenure but required the Gitanyow First Nation to agree that the Minister had satisfied the duty of consultation and accommodation with respect to both the consent to the change of control of Skeena and the economic component of potential infringements of their Aboriginal interests for the next five years.
The Gitanyow First Nation sought declarations to the effect that the Minister had failed to provide meaningful and adequate consultation and accommodation with respect to the consent to the change of control of Skeena and that the Crown’s duties were breached by both the Minister’s decision with respect to the change of control and the Minister’s conduct concerning the conditions in the Agreement. A declaration that the Crown’s duty is not owed only to ‘status’ Indians was also sought. Orders were sought quashing the Minister’s decision and prohibiting the advertisement for sale of any forest tenures arising out of Skeena’s licences.
1. The Crown’s duty of consultation and accommodation is founded in the honour of the Crown. This duty arises when the Crown has real or constructive knowledge of the potential existence of an Aboriginal right or title and contemplates conduct that might adversely affect it: [40], Haida Nation v British Columbia (Minister of Forests), [2004] 3 SCR 511 applied.
2. The duty of consultation and accommodation as founded in the honour of the Crown is continuing. The Crown is obliged to honour its duty each time it deals with a farming or forest licence if it has not fulfilled its duty when previously dealing with the licence: [43], Gitxsan and other First Nations v British Columbia (Minster of Forests), 2002 BCSC 1701 followed.
3. In this case, the Crown had knowledge of the Gitanyow First Nation’s claims since at least 1993. All of Skeena’s licences have been replaced since 1993 without adequate consultation and accommodation by the Crown. In dealing with the request for consent to the change of control of Skeena, the Crown was obliged to honour its previously unfulfilled duty of consultation and accommodation: [46]–[47].
4. The standards by which the courts will assess the efforts of the Crown to consult and accommodate must depend on the reasonableness of the Crown’s position. The Crown may bargain hard and has no duty to reach an agreement, but must be willing to make reasonable concessions based on the strength of the Aboriginal claim and the potentially adverse effect of the infringement in question. If the Crown does not make reasonable concessions, the court may conclude that the Crown is not negotiating in good faith with a willingness to accommodate Aboriginal interests: [50].
5. In this case, the Province’s overall approach was not unreasonable. It did not attempt to force the Agreement upon the Gitanyow: [52]–[53].
6. The inclusion of a provision in the Agreement that the Crown will have fulfilled its duty for a period of five years, as well as in respect of the Skeena change of control, did not breach the duty to consult and accommodate. However, the Crown’s offer to enter into the Agreement will not fulfil the Crown’s duty in respect of a change of control unless the Gitanyow First Nation are prepared to accept the offered sum of money as adequate non-cultural accommodation: [52]–[56].
7. Where the negotiations concerning the Agreement concerned something different from an accommodation pursuant to the Crown’s duty in relation to the change of control of Skeena, an assessment of the parties’ positions with respect to the Agreement will not answer the question of whether the Crown’s duty has been fulfilled: [55].
8. The Crown’s duties were not fulfilled through negotiations on the Memorandum of Understanding due to Buffalo Head’s unfulfilled silviculture obligations. The fact that Buffalo Head’s obligations appear to have been assumed by Timber Baron does not mean that the Crown’s obligations are fulfilled: [61].
9. In assessing the adequacy of the Crown’s efforts to fulfil its duty, the court will usually look at the overall offer of accommodation made by the Crown and weigh it against the potential impact of the infringement on the asserted Aboriginal interests having regard to the strength of those interests: [63].
10. The situation regarding the Buffalo Head silviculture obligations is unique. There has been no suggestion that part of the compensation offered during negotiations on the Memorandum of Understanding was intended to provide an accommodation in respect of this issue: [63]–[68].
37. ... [O]ne of the adjournments of this application was for the purpose of awaiting the decisions of the Supreme Court of Canada in the Haida and Taku River Tlingit cases. Those decisions were rendered on November 18, 2004 under the citations of Haida Nation v British Columbia (Minister of Forests), 2004 SCC 73 [(‘Haida’)] and Taku River Tlingit First Nation v British Columbia (Project Assessment Director), 2004 SCC 74 [(‘Taku River Tlingit’)].
...
40. Some of the more important principles to be taken from the Court’s decisions for the purpose of the present application are as follows:
(a) the Crown’s duty of consultation and accommodation is founded not in a fiduciary duty as had been held by the BC Court of Appeal, but in the honour of the Crown (Haida [16]);
(b) the duty to consult arises when the Crown has knowledge, real or constructive, of the potential existence of an Aboriginal right or title and contemplates conduct that might adversely affect it (Haida [35]);
(c) the scope of the Crown’s duty is proportionate to a preliminary assessment of the strength of the asserted Aboriginal right or title and to the seriousness of the potentially adverse effect upon the right or title (Haida [39]);
(d) the consultation must be meaningful, in good faith and with a willingness of the Crown to make changes based on the information that emerges during the consultation process (Taku River Tlingit [29]);
(e) sharp dealing is not permitted, but mere hard bargaining will not offend the right of the Aboriginal group to be consulted (Haida [42]);
(f) there is no duty to reach agreement and Aboriginal groups do not have a veto power over what can be done with land claimed by them; rather, it is a process of balancing interests, of give and take (Haida [10], [48]); and
(g) where accommodation is required in making decisions that may adversely affect an asserted Aboriginal right or title, the Crown must balance Aboriginal concerns reasonably with the potential impact of the decision on the asserted right or title and other societal interests (Haida [50], Taku River Tlingit [42]).
Bearing these principles in mind, I will now discuss the Crown’s efforts to fulfill its duty of consultation and accommodation in respect of the change of control of Skeena.
Discussion
General Comments
...
48. ... I have already dealt with the two questions of law concerning the strength of the Gitanyow’s claim of Aboriginal title and rights, and the impact of the infringement by the Crown. The outstanding issue on this application is whether the Crown has fulfilled its duty of consultation and accommodation with respect to the Gitanyow.
49. In the present case, there was no administrative process to deal with the Crown’s duty of consultation and accommodation. The Crown first undertook ad hoc negotiations with respect to the Memorandum of Understanding and subsequently with respect to the Forest and Range Agreement. There was no administrative review regarding the adequacy of those negotiations. Accordingly, the comments of McLachlin CJ in Haida with respect to the applicable standard of review are of no assistance in this case.
50. The honour of the Crown requires it to conduct such negotiations in good faith and with a willingness to accommodate Aboriginal interests where necessary. The standard by which the court will assess the efforts of the Crown must, of necessity, depend on the reasonableness of the Crown’s position. While the Crown may bargain hard and has no duty to reach an agreement, it must be willing to make reasonable concessions based on the strength of the Aboriginal claim and the potentially adverse effect of the infringement in question. If the Crown does not make reasonable concessions, it is open to the court to conclude that the Crown is not negotiating in good faith with a willingness to accommodate Aboriginal interests.
Negotiation of the Forest and Range Agreement
51. There is a fundamental point about the negotiations with respect to the Forest and Range Agreement which none of the counsel addressed directly. One of the Gitanyow’s complaints is that it is a term of the Agreement that they must agree that the Province will have fulfilled its duty with respect to the economic component of potential infringements over the next five years. This does not mean that the Province is acting in bad faith and is therefore acting in breach of its duty of consultation and accommodation. What it does mean, however, is that the parties have been negotiating something different than an accommodation in respect of the change of control of Skeena. They have been negotiating a broader financial accommodation, one that encompasses future dealings with Skeena’s licences as well as the change of control.
52. I can understand why the Province would want to negotiate a broader accommodation. It may not be commercially expedient for the Province to have to fulfill its duty of consultation and accommodation every time it has a dealing with a licence. The Province will usually be able to deal with the cultural component of infringements of Aboriginal interests on an operational level, but dealing with the economic component will normally require decisions at higher levels on both sides, which may take a considerable period of time. The Province has apparently made a business decision that it will offer funds to First Nations to compensate them for the economic component of all infringements over a five year period. The evidence is that 22 First Nations had entered into Forest and Range Agreements with the Province by June 2004, and counsel for the Province advised that there were 35 Agreements by the time of the hearing of this application.
53. The Province’s overall approach is not unreasonable in my view. It did not attempt to force the Forest and Range Agreement upon the Gitanyow. After an impasse was reached in the negotiations of the Memorandum of Understanding, the Province inquired of the Gitanyow whether they wished to discuss a Forest and Range Agreement, and counsel for the Gitanyow responded in a positive manner.
54. At the same time, I can understand the reluctance of the Gitanyow to effectively waive the non-cultural aspect of the duty of consultation and accommodation for a five year period in exchange for a monetary payment. The amount of the payment is established in advance, but the degree and nature of the infringements of Aboriginal interests over the five year period is not known. The Gitanyow have a business decision to make: is the offered monetary payment adequate to compensate them for the anticipated infringements and the risk that there could be other infringements during the five year period?
55. An assessment of the positions of the parties with respect to the Forestry and Range Agreement will not answer the question of whether the Crown has fulfilled its duty of consultation and accommodation in respect of the change of control of Skeena. I cannot decide whether the Province has fulfilled its duty on the basis of the negotiations on the Forestry and Range Agreement because the parties have been negotiating something different from an accommodation pursuant to the Crown’s duty in relation to the change of control of Skeena.
56. I do not agree with the submission of counsel for the Gitanyow that the Crown has breached its duty as a result of the inclusion of this provision in the Forest and Range Agreement. The Crown has simply offered a sum of money (and other concessions) in exchange for an agreement that it will have fulfilled its duty of consultation and accommodation for a period of five years, as well as its duty in respect of the change of control of Skeena. This does not constitute a breach of the Crown’s duty in respect of the Skeena change of control. But it does mean that the Crown’s offer to enter into the Forest and Range Agreement will not fulfill the Crown’s duty in respect of the Skeena change of control unless the Gitanyow are prepared to accept the offered sum of money and other concessions as adequate non-cultural accommodation in respect of the Skeena change of control and all logging operations and decisions affecting their claimed territory over the next five years.
57. As a result, it would not be appropriate for me to reach any conclusions with respect to the negotiations in respect of the Forest and Range Agreement. However, I will offer the following non-binding observations to assist the parties in the event that they decide to continue their negotiations on the Agreement:
1. The Province has demonstrated a limited degree of flexibility in changing the terms of the Agreement. I can understand the reluctance of the Province to make substantial changes to the form of the Agreement in a round of negotiations with a First Nation because it would provide an impetus for further changes in the ensuing rounds of negotiations.
2. I agree with the position of the Gitanyow that it is more theoretically logical for the First Nations to be compensated in respect of the economic component of infringement on the basis of the volume of trees harvested in their claimed territory. However, the Province has committed itself to a system of compensation based on the number of Aboriginal people. It is understandable that the Province would not want to deviate from this system of compensation once established.
3. On the one hand, if compensation is to be based on the number of Aboriginal people, it is reasonable for the Gitanyow to be compensated on the basis of their true numbers, as opposed to their numbers according to the records of the Department of Indian and Northern Affairs. On the other hand, it was not unreasonable for the Province to look to the number of registered Gitanyow in view of the fact that the 1993 Statement of Intent filed by the Gitanyow stated that there were 714 Aboriginal people represented by them. The Province has offered to include a clause in the Agreement which would adjust the revenue sharing calculation when the census pursuant to the Eligibility and Enrolment chapter is completed. One potential solution would be to make the adjustment retroactive to the beginning of the Agreement.
4. While I certainly understand the desire of the Gitanyow to be involved in a joint planning process, I also appreciate at least two of the Province’s difficulties. The first is that, while input of the Gitanyow may be desirable, they are not entitled to a veto. The second is the cost of funding of such a process.
I will comment separately on the topic of Buffalo Head silviculture obligations under the next heading.
Negotiation of the Memorandum of Understanding
58. The parties began negotiations on the Memorandum of Understanding as a means of establishing a framework for consultation. The negotiations expanded to address the economic component of the infringement of Aboriginal interests, but an impasse was reached in June 2003.
59. Counsel did not make detailed submissions with respect to whether the Province fulfilled its duty of consultation and accommodation in the negotiations on the Memorandum of Understanding because their submissions focused on the negotiations on the Forest and Range Agreement. One exception to this comment relates to the unfulfilled silviculture obligations of Buffalo Head, which was one of the unresolved issues when the parties ended their negotiations in June 2003.
60. In my opinion, the Crown has not yet fulfilled its duty of consultation and accommodation with respect to this issue. This is a unique situation because the Crown was a part owner of Skeena and benefited from the change of control. NWBC did not want to be burdened with the obligations associated with Buffalo Head, and the shares were transferred to a numbered company owned by the Crown. The affidavit evidence is unclear whether Timber Baron Contracting Ltd. acquired the shares of Buffalo Head from the Crown’s numbered company or whether it acquired the forest licence from Buffalo Head.
61. In these circumstances, the Crown’s duty of consultation and accommodation is not fulfilled in my opinion by the fact that Buffalo Head’s unfulfilled silviculture obligations appear to have been assumed by Timber Baron Contracting Ltd. (either as a result of a provision of the share purchase agreement or the provisions of s 54.6 of the Forest Act). There is no evidence that Timber Baron Contracting Ltd. has the capability or intention of fulfilling these obligations. The Province has not indicated what will done if Timber Baron does not fulfill the obligations.
62. Apart from the other aspects of the negotiations, the Crown’s failure to adequately address the issue of the Buffalo Head silviculture obligations leads me to conclude that it has not fulfilled its duty of consultation and accommodation as a result of the offers it made in the course of the negotiations on the Memorandum of Understanding.
63. In assessing the adequacy of the Crown’s efforts to fulfill its duty to consult and accommodate, the court will usually look at the overall offer of accommodation made by the Crown and weigh it against the potential impact of the infringement on the asserted Aboriginal interests having regard to the strength of those asserted interests. The court will not normally focus on one aspect of the negotiations because the process of give and take requires giving in some areas and taking in other areas. It is the overall result which must be assessed. However, the situation with respect to the Buffalo Head silviculture obligations is unique as a result of the fact that these obligations relate to the replenishment of timber which has already been harvested in the territory claimed by the Gitanyow. There are also the facts that the Crown had an ownership interest in Skeena and that the Crown became the indirect owner of Buffalo Head when it was excluded from NWBC’s acquisition of Skeena. It may be possible to address this issue by way of a monetary payment to the Gitanyow, but there has been no suggestion that a part of the compensation offered during the negotiations on the Memorandum of Understanding was intended to provide an accommodation in respect of this aspect.
Remedies
64. The relief sought by the Gitanyow on this application is the following:
(a) a declaration that the Minister has failed to provide meaningful and adequate consultation and accommodation to the Gitanyow with respect to his consent to the change of control of Skeena;
(b) an order quashing or setting aside the Minister’s decision to consent to the change of control of Skeena;
(c) a declaration that the decision of the Minister to give consent to the change of control of Skeena was a breach of the Crown’s duty of consultation and accommodation and of the Crown’s constitutional duties towards the Gitanyow;
(d) a declaration that the Crown’s duty to consult is not an obligation owed to "status" Indians under the Indian Act but rather is an obligation owed to all persons who have the right to exercise their Aboriginal rights in the affected territory and, in this case, is an obligation to the Gitanyow;
(e) a declaration that the conduct of the Minister subsequent to the Initial Reasons was a breach of the Crown’s duty of consultation and accommodation in that the Minister made the Forest and Range Agreement conditional on the requirement that the Gitanyow agree that consultation and accommodation had been fulfilled in respect of other decisions on forestry activities within the Gitanyow territory; and
(f) an order prohibiting the Minister and the District Manager from advertising for sale any forest tenures arising out of Skeena’s licences.
65. Although significant progress has been made by the parties since I issued the Initial Reasons, the Crown has not yet fulfilled its duty of consultation and accommodation with respect to the decision of the Minister to consent to the change of control of Skeena. I am prepared to make a declaration to that effect, but I do not believe that the remaining relief sought by the Gitanyow is appropriate or necessary at this stage. It is my view that the parties should resume negotiations on the Memorandum of Understanding (or the Forest and Range Agreement if both parties wish to do so) with the benefit of my views contained in these Reasons and the guidance provided by the Supreme Court of Canada in Haida and Taku River Tlingit.
66. The declaration which I am prepared to make will address the relief referred to in clauses (a) and (c) above. With respect to the relief referred to in clause (b) above, I continue to believe that it would not be appropriate to quash or set aside the Minister’s consent to the change of control of Skeena for the reasons expressed in the Initial Reasons and for the additional reason that the Crown has demonstrated a willingness to consult with the Gitanyow and accommodate their interests (albeit not yet adequately).
67. It is my opinion that the relief referred to in each of clauses (d), (e) and (f) goes beyond the parameters of the relief requested in the Petition and, in any event, I would not be inclined to grant such relief. The relief requested in clauses (d) and (e) is for declarations on isolated aspects of the negotiations related to the Forest and Range Agreement, and I have held that negotiations on the Agreement does not constitute consultation and accommodation for the purposes of the Minister’s consent to the change of control of Skeena. The relief requested in clause (f) relates to the forest tenure which the Crown has taken back from Skeena as a result of Skeena’s undercut over the past two years and the take-back provisions of the Forest Act and the Forestry Revitalization Act. Although the Gitanyow are hoping to obtain some of this forest tenure and it has been part of the negotiations to date, I cannot conclude that no form of accommodation by the Crown would be adequate unless it included this forest tenure being given to the Gitanyow.
68. I declare that the Crown has not yet fulfilled its duty of consultation and accommodation with respect to the decision of the Minister to consent to the change of control of Skeena. I encourage the parties to resume negotiations. Each of the parties will continue to have liberty to apply to this Court with respect to any question relating to the duty of consultation and accommodation, and the Gitanyow will continue to have liberty to re-apply for an order quashing or setting aside the consent of the Minister to the change of control of Skeena.
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URL: http://www.austlii.edu.au/au/journals/AUIndigLawRpr/2005/25.html