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SUPREME COURT OF CANADA

 

Citation: Clyde River (Hamlet) v. Petroleum Geo‑Services Inc., 2017 SCC 40, [2017] 1 S.C.R. 1069

Appeal heard: November 30, 2016

Judgment rendered: July 26, 2017

Docket: 36692

 

Between:

 

Hamlet of Clyde River, Nammautaq Hunters & Trappers Organization — Clyde River and Jerry Natanine

Appellants

 

and

 

Petroleum Geo-Services Inc. (PGS), Multi Klient Invest As (MKI), TGS-Nopec Geophysical Company ASA (TGS) and Attorney General of Canada

Respondents

 

- and -

 

Attorney General of Ontario, Attorney General of Saskatchewan, Nunavut Tunngavik Incorporated, Makivik Corporation, Nunavut Wildlife Management Board, Inuvialuit Regional Corporation and Chiefs of Ontario

Interveners

 

Coram: McLachlin C.J. and Abella, Moldaver, Karakatsanis, Wagner, Gascon, Côté, Brown and Rowe JJ.

 

Reasons for Judgment:

(paras. 1 to 53)

Karakatsanis and Brown JJ. (McLachlin C.J. and Abella, Moldaver, Wagner, Gascon, Côté and Rowe JJ. concurring)

 

 

 


Clyde River (Hamlet) v. Petroleum Geo‑Services Inc., 2017 SCC 40, [2017] 1 S.C.R. 1069

Hamlet of Clyde River,

Nammautaq Hunters & Trappers

Organization — Clyde River and Jerry Natanine                                       Appellants

v.

Petroleum Geo‑Services Inc. (PGS),

Multi Klient Invest As (MKI),

TGS‑NOPEC Geophysical Company ASA (TGS) and

Attorney General of Canada                                                                      Respondents

and

Attorney General of Ontario,

Attorney General of Saskatchewan,

Nunavut Tunngavik Incorporated,

Makivik Corporation,

Nunavut Wildlife Management Board,

Inuvialuit Regional Corporation and

Chiefs of Ontario                                                                                          Interveners

Indexed as: Clyde River (Hamlet) v. Petroleum Geo‑Services Inc.

2017 SCC 40

File No.: 36692.

2016: November 30; 2017: July 26.[1]

Present: McLachlin C.J. and Abella, Moldaver, Karakatsanis, Wagner, Gascon, Côté, Brown and Rowe JJ.

on appeal from the federal court of appeal

                    Constitutional law — Inuit — Treaty rights — Crown — Duty to consult — Decision by federal independent regulatory agency which could impact upon treaty rights — Offshore seismic testing for oil and gas resources potentially affecting Inuit treaty rights — National Energy Board authorizing project — Whether Board’s approval process triggered Crown’s duty to consult — Whether Crown can rely on Board’s process to fulfill its duty — Role of Board in considering Crown consultation before approval of project — Whether consultation was adequate in this case — Canada Oil and Gas Operations Act, R.S.C. 1985, c. O-7, s. 5(1) (b).

                    The National Energy Board (NEB), a federal administrative tribunal and regulatory agency, is the final decision maker for issuing authorizations for activities such as exploration and drilling for the production of oil and gas in certain designated areas. The proponents applied to the NEB to conduct offshore seismic testing for oil and gas in Nunavut. The proposed testing could negatively affect the treaty rights of the Inuit of Clyde River, who opposed the seismic testing, alleging that the duty to consult had not been fulfilled in relation to it. The NEB granted the requested authorization. It concluded that the proponents made sufficient efforts to consult with Aboriginal groups and that Aboriginal groups had an adequate opportunity to participate in the NEB’s process. The NEB also concluded that the testing was unlikely to cause significant adverse environmental effects. Clyde River applied for judicial review of the NEB’s decision. The Federal Court of Appeal found that while the duty to consult had been triggered, the Crown was entitled to rely on the NEB to undertake such consultation, and the Crown’s duty to consult had been satisfied in this case by the NEB’s process.

                    Held: The appeal should be allowed and the NEB’s authorization quashed.

                    The NEB’s approval process, in this case, triggered the duty to consult. Crown conduct which would trigger the duty to consult is not restricted to the exercise by or on behalf of the Crown of statutory powers or of the royal prerogative, nor is it limited to decisions that have an immediate impact on lands and resources. The NEB is not, strictly speaking, “the Crown” or an agent of the Crown. However, it acts on behalf of the Crown when making a final decision on a project application. In this context, the NEB is the vehicle through which the Crown acts. It therefore does not matter whether the final decision maker is Cabinet or the NEB. In either case, the decision constitutes Crown action that may trigger the duty to consult. The substance of the duty does not change when a regulatory agency holds final decision-making authority.

                    It is open to legislatures to empower regulatory bodies to play a role in fulfilling the Crown’s duty to consult. While the Crown always holds ultimate responsibility for ensuring consultation is adequate, it may rely on steps undertaken by a regulatory agency to fulfill its duty to consult. Where the regulatory process being relied upon does not achieve adequate consultation or accommodation, the Crown must take further measures. Also, where the Crown relies on the processes of a regulatory body to fulfill its duty in whole or in part, it should be made clear to affected Indigenous groups that the Crown is so relying. The NEB has the procedural powers necessary to implement consultation, and the remedial powers to, where necessary, accommodate affected Aboriginal claims, or Aboriginal and treaty rights. Its process can therefore be relied on by the Crown to completely or partially fulfill the Crown’s duty to consult.

                    The NEB has broad powers to hear and determine all relevant matters of fact and law, and its decisions must conform to s. 35(1) the Constitution Act, 1982 . It follows that the NEB can determine whether the Crown’s duty has been fulfilled. The public interest and the duty to consult do not operate in conflict here. The duty to consult, being a constitutional imperative, gives rise to a special public interest that supersedes other concerns typically considered by tribunals tasked with assessing the public interest. A project authorization that breaches the constitutionally protected rights of Indigenous peoples cannot serve the public interest. When affected Indigenous groups have squarely raised concerns about Crown consultation with the NEB, the NEB must usually address those concerns in reasons. The degree of consideration that is appropriate will depend on the circumstances of each case. Above all, any decision affecting Aboriginal or treaty rights made on the basis of inadequate consultation will not be in compliance with the duty to consult. Where the Crown’s duty to consult remains unfulfilled, the NEB must withhold project approval. Where the NEB fails to do so, its approval decision should be quashed on judicial review.

                    While the Crown may rely on the NEB’s process to fulfill its duty to consult, the consultation and accommodation efforts in this case were inadequate and fell short in several respects. First, the inquiry was misdirected. The consultative inquiry is not properly into environmental effects per se. Rather, it inquires into the impact on the right itself. No consideration was given in the NEB’s environmental assessment to the source of the Inuit’s treaty rights, nor to the impact of the proposed testing on those rights. Second, although the Crown relies on the processes of the NEB as fulfilling its duty to consult, that was not made clear to the Inuit. Finally, and most importantly, the process provided by the NEB did not fulfill the Crown’s duty to conduct the deep consultation that was required here. Limited opportunities for participation and consultation were made available. There were no oral hearings and there was no participant funding. While these procedural safeguards are not always necessary, their absence in this case significantly impaired the quality of consultation. As well, the proponents eventually responded to questions raised during the environmental assessment process in the form of a practically inaccessible document months after the questions were asked. There was no mutual understanding on the core issues — the potential impact on treaty rights, and possible accommodations. As well, the changes made to the project as a result of consultation were insignificant concessions in light of the potential impairment of the Inuit’s treaty rights. Therefore, the Crown breached its duty to consult in respect of the proposed testing.

Cases Cited

                    Applied: Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council, 2010 SCC 43, [2010] 2 S.C.R. 650; distinguished: Taku River Tlingit First Nation v. British Columbia (Project Assessment Director), 2004 SCC 74, [2004] 3 S.C.R. 550; referred to: Chippewas of the Thames First Nation v. Enbridge Pipelines Inc., 2017 SCC 41, [2017] 1 S.C.R. 1099; Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73, [2004] 3 S.C.R. 511; R. v. Kapp, 2008 SCC 41, [2008] 2 S.C.R. 483; Ross River Dena Council v. Yukon, 2012 YKCA 14, 358 D.L.R. (4th) 100; Beckman v. Little Salmon/Carmacks First Nation, 2010 SCC 53, [2010] 3 S.C.R. 103; Chippewas of the Thames First Nation v. Enbridge Pipelines Inc., 2015 FCA 222, [2016] 3 F.C.R. 96; McAteer v. Canada (Attorney General), 2014 ONCA 578, 121 O.R. (3d) 1; Town Investments Ltd. v. Department of the Environment, [1978] A.C. 359; R. v. Conway, 2010 SCC 22, [2010] 1 S.C.R. 765; Quebec (Attorney General) v. Canada (National Energy Board), [1994] 1 S.C.R. 159; Standing Buffalo Dakota First Nation v. Enbridge Pipelines Inc., 2009 FCA 308, [2010] 4 F.C.R. 500; Tsilhqot’in Nation v. British Columbia, 2014 SCC 44, [2014] 2 S.C.R. 257; Kainaiwa/Blood Tribe v. Alberta (Energy), 2017 ABQB 107; Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817; Qikiqtani Inuit Assn. v. Canada (Minister of Natural Resources), 2010 NUCJ 12, 54 C.E.L.R. (3d) 263.

Statutes and Regulations Cited

Canada Oil and Gas Operations Act, R.S.C. 1985, c. O‑7, ss. 2.1 , 3 , 5(1) (a), 5(1) (b), 5(4) , 5(5) , 5.002  [ad. 2015, c. 4, s. 7], 5.2(2), 5.31, 5.32, 5.331 [idem, s. 13 ], 5.36.

Canadian Environmental Assessment Act, S.C. 1992, c. 37 .

Canadian Environmental Assessment Act, 2012, S.C. 2012, c. 19, s. 52 .

Constitution Act, 1982, s. 35 .

National Energy Board Act, R.S.C. 1985, c. N‑7, s. 12(2) , 16.3 , 24 .

National Energy Board Act, S.C. 1959, c. 46.

 

Treaties and Agreements

Nunavut Land Claims Agreement (1993).

Authors Cited

Freedman, Robert, and Sarah Hansen. “Aboriginal Rights vs. The Public Interest” prepared for Pacific Business & Law Institute Conference, Vancouver, B.C. (February 26-27, 2009) (online: http://www.millerthomson.com/assets/files/article_attachments/Aboriginal_Rights_vs_The_Public_Interest.pdf; archived version: http://www.scc-csc.ca/cso-dce/2017SCC-CSC40_1_eng.pdf).

Hogg, Peter W., Patrick J. Monahan and Wade K. Wright. Liability of the Crown, 4th ed. Toronto: Carswell, 2011.

Isaac, Thomas, and Anthony Knox. “The Crown’s Duty to Consult Aboriginal People” (2003), 41 Alta. L. Rev. 49.

Newman, Dwight G. The Duty to Consult: New Relationships with Aboriginal Peoples. Saskatoon: Purich Publishing, 2009.

                    APPEAL from a judgment of the Federal Court of Appeal (Nadon, Dawson and Boivin JJ.A.), 2015 FCA 179, [2016] 3 F.C.R. 167, 474 N.R. 96, 94 C.E.L.R. (3d) 1, [2015] F.C.J. No. 991 (QL), 2015 CarswellNat 3750 (WL Can.), affirming a decision of the National Energy Board, No. 5554587, June 26, 2014. Appeal allowed.

                    Nader R. Hasan, Justin Safayeni and Pam Hrick, for the appellants.

                    Sandy Carpenter and Ian Breneman, for the respondents Petroleum Geo‑Services Inc. (PGS), Multi Klient Invest As (MKI) and TGS‑NOPEC Geophysical Company ASA (TGS).

                    Mark R. Kindrachuk, Q.C., and Peter Southey, for the respondent the Attorney General of Canada.

                    Manizeh Fancy and Richard Ogden, for the intervener the Attorney General of Ontario.

                    Richard James Fyfe, for the intervener the Attorney General of Saskatchewan.

                    Dominique Nouvet, Marie Belleau and Sonya Morgan, for the intervener Nunavut Tunngavik Incorporated.

                    Written submissions only by David Schulze and Nicholas Dodd, for the intervener the Makivik Corporation.

                    Marie‑France Major and Thomas Slade, for the intervener the Nunavut Wildlife Management Board.

                    Kate Darling, Lorraine Land, Matt McPherson and Krista Nerland, for the intervener the Inuvialuit Regional Corporation.

                    Maxime Faille, Jaimie Lickers and Guy Régimbald, for the intervener the Chiefs of Ontario.

                    The judgment of the Court was delivered by

                    Karakatsanis and Brown JJ. —

I.          Introduction

[1]                              This Court has on several occasions affirmed the role of the duty to consult in fostering reconciliation between Canada’s Indigenous peoples and the Crown. In this appeal, and its companion Chippewas of the Thames First Nation v. Enbridge Pipelines Inc., 2017 SCC 41, [2017] 1 S.C.R. 1099, we consider the Crown’s duty to consult with Indigenous peoples before an independent regulatory agency authorizes a project which could impact upon their rights. The Court’s jurisprudence shows that the substance of the duty does not change when a regulatory agency holds final decision-making authority in respect of a project. While the Crown always owes the duty to consult, regulatory processes can partially or completely fulfill this duty.

[2]                              The Hamlet of Clyde River lies on the northeast coast of Baffin Island, in Nunavut. The community is situated on a flood plain between Patricia Bay and the Arctic Cordillera. Most residents of Clyde River are Inuit, who rely on marine mammals for food and for their economic, cultural, and spiritual well-being. They have harvested marine mammals for generations. The bowhead whale, the narwhal, the ringed, bearded, and harp seals, and the polar bear are of particular importance to them. Under the Nunavut Land Claims Agreement (1993), the Inuit of Clyde River ceded all Aboriginal claims, rights, title, and interests in the Nunavut Settlement Area, including Clyde River, in exchange for defined treaty rights, including the right to harvest marine mammals.

[3]                              In 2011, the respondents TGS-NOPEC Geophysical Company ASA, Multi Klient Invest As and Petroleum Geo-Services Inc. (the proponents) applied to the National Energy Board (NEB) to conduct offshore seismic testing for oil and gas resources. It is undisputed that this testing could negatively affect the harvesting rights of the Inuit of Clyde River. After a period of consultation among the project proponents, the NEB, and affected Inuit communities, the NEB granted the requested authorization.

[4]                              While the Crown may rely on the NEB’s process to fulfill its duty to consult, considering the importance of the established treaty rights at stake and the potential impact of the seismic testing on those rights, we agree with the appellants that the consultation and accommodation efforts in this case were inadequate. For the reasons set out below, we would therefore allow the appeal and quash the NEB’s authorization.

II.        Background

A.       Legislative Framework

[5]                              The Canada Oil and Gas Operations Act, R.S.C. 1985, c. O-7  (COGOA ), aims, in part, to promote responsible exploration for and exploitation of oil and gas resources (s. 2.1 ). It applies to exploration and drilling for the production, conservation, processing, and transportation of oil and gas in certain designated areas, including Nunavut (s. 3). Engaging in such activities is prohibited without an operating licence under s. 5(1) (a) or an authorization under s. 5(1) (b).

[6]                              The NEB is a federal administrative tribunal and regulatory agency established by the National Energy Board Act, R.S.C. 1985, c. N-7  (NEB  Act ). In this case, it is the final decision maker for issuing an authorization under s. 5(1) (b) of COGOA . The NEB has broad discretion to impose requirements for authorization under s. 5(4) , and can ask parties to provide any information it deems necessary to comply with its statutory mandate (s. 5.31 ).

B.        The Seismic Testing Authorization

[7]                              In May 2011, the proponents applied to the NEB  for an authorization under s. 5(1) (b) of COGOA  to conduct seismic testing in Baffin Bay and Davis Strait, adjacent to the area where the Inuit have treaty rights to harvest marine mammals. The proposed testing contemplated towing airguns by ship through a project area. These airguns produce underwater sound waves, which are intended to find and measure underwater geological resources such as petroleum. The testing was to run from July through November, for five successive years.

[8]                              The NEB launched an environmental assessment of the project.[2]

[9]                              Clyde River opposed the seismic testing, and filed a petition against it with the NEB  in May 2011. In 2012, the proponents responded to requests for further information from the NEB . They held meetings in communities that would be affected by the testing, including Clyde River.

[10]                          In April and May 2013, the NEB  held meetings in Pond Inlet, Clyde River, Qikiqtarjuaq, and Iqaluit to collect comments from the public on the project. Representatives of the proponents attended these meetings. Community members asked basic questions about the effects of the survey on marine mammals in the region, but the proponents were unable to answer many of them. For example, in Pond Inlet, a community member asked the proponents which marine mammals would be affected by the survey. The proponents answered: “That’s a very difficult question to answer because we’re not the core experts” (A.R., vol. III, at p. 541). Similarly, in Clyde River, a community member asked how the testing would affect marine mammals. The proponents answered:

. . . a lot of work has been done with seismic surveys in other places and a lot of that information is used in doing the environmental assessment, the document that has been submitted by the companies to the National Energy Board for the approval process. It has a section on, you know, marine mammals and the effects on marine mammals.

(A.R., vol. III, at p. 651)

[11]                          These are but two examples of multiple instances of the proponents’ failure to offer substantive answers to basic questions about the impacts of the proposed seismic testing. That failure led the NEB , in May 2013, to suspend its assessment. In August 2013, the proponents filed a 3,926-page document with the NEB , purporting to answer those questions. This document was posted on the NEB  website and delivered to the hamlet offices. The vast majority of this document was not translated into Inuktitut. No further efforts were made to determine whether this document was accessible to the communities, and whether their questions were answered. After this document was filed, the NEB  resumed its assessment.

[12]                          Throughout the environmental assessment process, Clyde River and various Inuit organizations filed letters of comment with the NEB , noting the inadequacy of consultation and expressing concerns about the testing.

[13]                          In April 2014, organizations representing the appellants and Inuit in other communities wrote to the Minister of Aboriginal Affairs and Northern Development and to the NEB , stating their view that the duty to consult had not been fulfilled in relation to the testing. This could be remedied, they said, by completing a strategic environmental assessment[3] before authorizing any seismic testing. In May, the Nunavut Marine Council also wrote to the NEB , with a copy to the Minister, asking that any regulatory decisions affecting the Nunavut Settlement Area’s marine environment be postponed until completion of the strategic environmental assessment. This assessment was necessary, in the Council’s view, to understand the baseline conditions in the marine environment and to ensure that seismic tests are properly regulated.

[14]                          In June 2014, the Minister responded to both letters, “disagree[ing] with the view that seismic exploration of the region should be put on hold until the completion of a strategic environmental assessment” (A.R., vol. IV, at p. 967). A Geophysical Operations Authorization letter from the NEB  soon followed, advising that the environmental assessment report was completed and that the authorization had been granted.

[15]                          In its environmental assessment report, the NEB  discussed consultation with, and the participation of, Aboriginal groups in the NEB  process. It concluded that the proponents “made sufficient efforts to consult with potentially-impacted Aboriginal groups and to address concerns raised” and that “Aboriginal groups had an adequate opportunity to participate in the NEB ’s [environmental assessment] process” (A.R., vol. I, at p. 24). It also determined that the testing could change the migration routes of marine mammals and increase their risk of mortality, thereby affecting traditional harvesting of marine mammals including bowhead whales and narwhals, which are both identified as being of “Special Concern” by the Committee on the Status of Endangered Wildlife in Canada (COSEWIC). The NEB concluded, however, that the testing was unlikely to cause significant adverse environmental effects given the mitigation measures that the proponents would implement.

C.       The Judicial Review Proceedings

[16]                          Clyde River applied to the Federal Court of Appeal for judicial review of the NEB ’s decision to grant the authorization. Dawson J.A. (Nadon and Boivin JJ.A. concurring) found that the duty to consult had been triggered because the NEB  could not grant the authorization without the minister’s approval (or waiver of the requirement for approval) of a benefits plan for the project, pursuant to s. 5.2(2)  of COGOA  (2015 FCA 179, [2016] 3 F.C.R. 167). The Federal Court of Appeal characterized the degree of consultation owed in the circumstances as deep, as that concept was discussed in Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73, [2004] 3 S.C.R. 511, at para. 44, and found that the Crown was entitled to rely on the NEB  to undertake such consultation.

[17]                          The Court of Appeal also concluded that the Crown’s duty to consult had been satisfied by the nature and scope of the NEB ’s processes. The conditions upon which the authorization had been granted showed that the interests of the Inuit had been sufficiently considered and that further consultation would be expected to occur were the proposed testing to be followed by further development activities. In the circumstances, a strategic environmental assessment report was not required.

III.     Analysis

[18]                          The following issues arise in this appeal:

1.                  Can an NEB  approval process trigger the duty to consult?

2.                  Can the Crown rely on the NEB ’s process to fulfill the duty to consult?

3.                  What is the NEB ’s role in considering Crown consultation before approval?

4.                  Was the consultation adequate in this case?

A.       The Duty to Consult — General Principles

[19]                          The duty to consult seeks to protect Aboriginal and treaty rights while furthering reconciliation between Indigenous peoples and the Crown (Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council, 2010 SCC 43, [2010] 2 S.C.R. 650, at para. 34). It has both a constitutional and a legal dimension (R. v. Kapp, 2008 SCC 41, [2008] 2 S.C.R. 483, at para. 6; Carrier Sekani, at para. 34). Its constitutional dimension is grounded in the honour of the Crown (Kapp, at para. 6). This principle is in turn enshrined in s. 35(1)  of the Constitution Act, 1982 , which recognizes and affirms existing Aboriginal and treaty rights (Taku River Tlingit First Nation v. British Columbia (Project Assessment Director), 2004 SCC 74, [2004] 3 S.C.R. 550, at para. 24). And, as a legal obligation, it is based in the Crown’s assumption of sovereignty over lands and resources formerly held by Indigenous peoples (Haida, at para. 53).

[20]                          The content of the duty, once triggered, falls along a spectrum ranging from limited to deep consultation, depending upon the strength of the Aboriginal claim, and the seriousness of the potential impact on the right. Each case must be considered individually. Flexibility is required, as the depth of consultation required may change as the process advances and new information comes to light (Haida, at paras. 39 and 43-45).

[21]                          This Court has affirmed that it is open to legislatures to empower regulatory bodies to play a role in fulfilling the Crown’s duty to consult (Carrier Sekani, at para. 56; Haida, at para. 51). The appellants argue that a regulatory process alone cannot fulfill the duty to consult because at least some direct engagement between “the Crown” and the affected Indigenous community is necessary.

[22]                          In our view, while the Crown may rely on steps undertaken by a regulatory agency to fulfill its duty to consult in whole or in part and, where appropriate, accommodate, the Crown always holds ultimate responsibility for ensuring consultation is adequate. Practically speaking, this does not mean that a minister of the Crown must give explicit consideration in every case to whether the duty to consult has been satisfied, or must directly participate in the process of consultation. Where the regulatory process being relied upon does not achieve adequate consultation or accommodation, the Crown must take further measures to meet its duty. This might entail filling any gaps on a case-by-case basis or more systemically through legislative or regulatory amendments (see e.g. Ross River Dena Council v. Yukon, 2012 YKCA 14, 358 D.L.R. (4th) 100). Or, it might require making submissions to the regulatory body, requesting reconsideration of a decision, or seeking a postponement in order to carry out further consultation in a separate process before the decision is rendered. And, if an affected Indigenous group is (like the Inuit of Nunavut) a party to a modern treaty and perceives the process to be deficient, it should, as it did here, request such direct Crown engagement in a timely manner (since parties to treaties are obliged to act diligently to advance their respective interests) (Beckman v. Little Salmon/Carmacks First Nation, 2010 SCC 53, [2010] 3 S.C.R. 103, at para. 12).

[23]                          Further, because the honour of the Crown requires a meaningful, good faith consultation process (Haida, at para. 41), where the Crown relies on the processes of a regulatory body to fulfill its duty in whole or in part, it should be made clear to affected Indigenous groups that the Crown is so relying. Guidance about the form of the consultation process should be provided so that Indigenous peoples know how consultation will be carried out to allow for their effective participation and, if necessary, to permit them to raise concerns with the proposed form of the consultations in a timely manner.

[24]                          Above all, and irrespective of the process by which consultation is undertaken, any decision affecting Aboriginal or treaty rights made on the basis of inadequate consultation will not be in compliance with the duty to consult, which is a constitutional imperative. Where challenged, it should be quashed on judicial review. That said, judicial review is no substitute for adequate consultation. True reconciliation is rarely, if ever, achieved in courtrooms. Judicial remedies may seek to undo past infringements of Aboriginal and treaty rights, but adequate Crown consultation before project approval is always preferable to after-the-fact judicial remonstration following an adversarial process. Consultation is, after all, “[c]oncerned with an ethic of ongoing relationships” (Carrier Sekani, at para. 38, quoting D. G. Newman, The Duty to Consult: New Relationships with Aboriginal Peoples (2009), at p. 21). As the Court noted in Haida, “[w]hile Aboriginal claims can be and are pursued through litigation, negotiation is a preferable way of reconciling state and Aboriginal interests” (para. 14). No one benefits — not project proponents, not Indigenous peoples, and not non-Indigenous members of affected communities — when projects are prematurely approved only to be subjected to litigation.

B.        Can an NEB Approval Process Trigger the Duty to Consult?

[25]                          The duty to consult is triggered when the Crown has actual or constructive knowledge of a potential Aboriginal claim or Aboriginal or treaty rights that might be adversely affected by Crown conduct (Haida, at para. 35; Carrier Sekani, at para. 31). Crown conduct which would trigger the duty is not restricted to the exercise by or on behalf of the Crown of statutory powers or of the royal prerogative, nor is it limited to decisions that have an immediate impact on lands and resources. The concern is for adverse impacts, however made, upon Aboriginal and treaty rights and, indeed, a goal of consultation is to identify, minimize and address adverse impacts where possible (Carrier Sekani, at paras. 45-46).

[26]                          In this appeal, all parties agreed that the Crown’s duty to consult was triggered, although agreement on just what Crown conduct triggered the duty has proven elusive. The Federal Court of Appeal saw the trigger in COGOA ’s requirement for ministerial approval (or waiver of the requirement for approval) of a benefits plan for the testing. In the companion appeal of Chippewas of the Thames, the majority of the Federal Court of Appeal concluded that it was not necessary to decide whether the duty to consult was triggered since the Crown was not a party before the NEB , but suggested the only Crown action involved might have been the 1959 enactment of the NEB Act[4] (Chippewas of the Thames First Nation v. Enbridge Pipelines Inc., 2015 FCA 222, [2016] 3 F.C.R. 96). In short, the Federal Court of Appeal in both cases was of the view that only action by a minister of the Crown or a government department, or a Crown corporation, can constitute Crown conduct triggering the duty to consult. And, before this Court in Chippewas of the Thames, the Attorney General of Canada argued that the duty was triggered by the NEB ’s approval of the pipeline project, because it was state action with the potential to affect Aboriginal or treaty rights.

[27]                          Contrary to the Federal Court of Appeal’s conclusions on this point, we agree that the NEB ’s approval process, in this case, as in Chippewas of the Thames, triggered the duty to consult.

[28]                          It bears reiterating that the duty to consult is owed by the Crown. In one sense, the “Crown” refers to the personification in Her Majesty of the Canadian state in exercising the prerogatives and privileges reserved to it. The Crown also, however, denotes the sovereign in the exercise of her formal legislative role (in assenting, refusing assent to, or reserving legislative or parliamentary bills), and as the head of executive authority (McAteer v. Canada (Attorney General), 2014 ONCA 578, 121 O.R. (3d) 1, at para. 51; P. W. Hogg, P. J. Monahan and W. K. Wright, Liability of the Crown (4th ed. 2011), at pp. 11-12; but see Carrier Sekani, at para. 44). For this reason, the term “Crown” is commonly used to symbolize and denote executive power. This was described by Lord Simon of Glaisdale in Town Investments Ltd. v. Department of the Environment, [1978] A.C. 359 (H.L.), at p. 397:

The crown as an object is a piece of jewelled headgear under guard at the Tower of London. But it symbolises the powers of government which were formerly wielded by the wearer of the crown; so that by the 13th century crimes were committed not only against the king’s peace but also against “his crown and dignity”: Pollock and Maitland, History of English Law, 2nd ed. (1898), vol. I, p. 525. The term “the Crown” is therefore used in constitutional law to denote the collection of such of those powers as remain extant (the royal prerogative), together with such other powers as have been expressly conferred by statute on “the Crown.”

[29]                          By this understanding, the NEB  is not, strictly speaking, “the Crown”. Nor is it, strictly speaking, an agent of the Crown, since — as the NEB  operates independently of the Crown’s ministers — no relationship of control exists between them (Hogg, Monahan and Wright, at p. 465). As a statutory body holding responsibility under s. 5(1) (b) of COGOA , however, the NEB  acts on behalf of the Crown when making a final decision on a project application. Put plainly, once it is accepted that a regulatory agency exists to exercise executive power as authorized by legislatures, any distinction between its actions and Crown action quickly falls away. In this context, the NEB  is the vehicle through which the Crown acts. Hence this Court’s interchangeable references in Carrier Sekani to “government action” and “Crown conduct” (paras. 42-44). It therefore does not matter whether the final decision maker on a resource project is Cabinet or the NEB . In either case, the decision constitutes Crown action that may trigger the duty to consult. As Rennie J.A. said in dissent at the Federal Court of Appeal in Chippewas of the Thames, “[t]he duty, like the honour of the Crown, does not evaporate simply because a final decision has been made by a tribunal established by Parliament, as opposed to Cabinet” (para. 105). The action of the NEB , taken in furtherance of its statutory powers under s. 5(1) (b) of COGOA  to make final decisions respecting such testing as was proposed here, clearly constitutes Crown action.

C.       Can the Crown Rely on the NEB ’s Process to Fulfill the Duty to Consult?

[30]                          As we have said, while ultimate responsibility for ensuring the adequacy of consultation remains with the Crown, the Crown may rely on steps undertaken by a regulatory agency to fulfill the duty to consult. Whether, however, the Crown is capable of doing so, in whole or in part, depends on whether the agency’s statutory duties and powers enable it to do what the duty requires in the particular circumstances (Carrier Sekani, at paras. 55 and 60). In the NEB ’s case, therefore, the question is whether the NEB  is able, to the extent it is being relied on, to provide an appropriate level of consultation and, where necessary, accommodation to the Inuit of Clyde River in respect of the proposed testing.

[31]                          We note that the NEB  and COGOA  each predate judicial recognition of the duty to consult. However, given the flexible nature of the duty, a process that was originally designed for a different purpose may be relied on by the Crown so long as it affords an appropriate level of consultation to the affected Indigenous group (Beckman, at para. 39; Taku River, at para. 22). Under COGOA, the NEB  has a significant array of powers that permit extensive consultation. It may conduct hearings, and has broad discretion to make orders or elicit information in furtherance of COGOA  and the public interest (ss. 5.331 , 5.31(1)  and 5.32 ). It can also require studies to be undertaken and impose preconditions to approval (s. 5(4) ). In the case of designated projects, it can also (as here) conduct environmental assessments, and establish participant funding programs to facilitate public participation (s. 5.002 ).[5]

[32]                          COGOA  also grants the NEB  broad powers to accommodate the concerns of Indigenous groups where necessary. The NEB can attach any terms and conditions it sees fit to an authorization issued under s. 5(1) (b), and can make such authorization contingent on their performance (ss. 5(4)  and 5.36(1) ). Most importantly, the NEB  may require accommodation by exercising its discretion to deny an authorization or by reserving its decision pending further proceedings (ss. 5(1) (b), 5(5)  and 5.36(2) ).

[33]                          The NEB has also developed considerable institutional expertise, both in conducting consultations and in assessing the environmental impacts of proposed projects. Where the effects of a proposed project on Aboriginal or treaty rights substantially overlap with the project’s potential environmental impact, the NEB  is well situated to oversee consultations which seek to address these effects, and to use its technical expertise to assess what forms of accommodation might be available.

[34]                          In sum, the NEB  has (1) the procedural powers necessary to implement consultation; and (2) the remedial powers to, where necessary, accommodate affected Aboriginal claims, or Aboriginal and treaty rights. Its process can therefore be relied on by the Crown to completely or partially fulfill the Crown’s duty to consult. Whether the NEB ’s process did so in this case, we consider below.

D.       What Is the NEB ’s Role in Considering Crown Consultation Before Approval?

[35]                          The appellants argue that, as a tribunal empowered to decide questions of law, the NEB  must exercise its decision-making authority in accordance with s. 35(1)  of the Constitution Act, 1982  by evaluating the adequacy of consultation before issuing an authorization for seismic testing. In contrast, the proponents submit that there is no basis in this Court’s jurisprudence for imposing this obligation on the NEB . Although the Attorney General of Canada agrees with the appellants that the NEB  has the legal capacity to decide constitutional questions when doing so is necessary to its decision-making powers, she argues that the NEB ’s environmental assessment decision in this case appropriately considered the adequacy of the proponents’ consultation efforts.

[36]                          Generally, a tribunal empowered to consider questions of law must determine whether such consultation was constitutionally sufficient if the issue is properly raised. The power of a tribunal “to decide questions of law implies a power to decide constitutional issues that are properly before it, absent a clear demonstration that the legislature intended to exclude such jurisdiction from the tribunal’s power” (Carrier Sekani, at para. 69). Regulatory agencies with the authority to decide questions of law have both the duty and authority to apply the Constitution, unless the authority to decide the constitutional issue has been clearly withdrawn (R. v. Conway, 2010 SCC 22, [2010] 1 S.C.R. 765, at para. 77). It follows that they must ensure their decisions comply with s. 35  of the Constitution Act, 1982  (Carrier Sekani, at para. 72).

[37]                          The NEB has broad powers under both the NEB Act and COGOA  to hear and determine all relevant matters of fact and law (NEB Act, s. 12(2); COGOA, s. 5.31(2) ). No provision in either statute suggests an intention to withhold from the NEB  the power to decide the adequacy of consultation. And, in Quebec (Attorney General) v. Canada (National Energy Board), [1994] 1 S.C.R. 159, this Court concluded that NEB  decisions must conform to s. 35(1)  of the Constitution Act, 1982 . It follows that the NEB  can determine whether the Crown’s duty to consult has been fulfilled.

[38]                          We note that the majority at the Federal Court of Appeal in Chippewas of the Thames considered that this issue was not properly before the NEB . It distinguished Carrier Sekani on the basis that the Crown was not a party to the NEB  hearing in Chippewas of the Thames, while the Crown (in the form of BC Hydro, a Crown corporation) was a party in the utilities commission proceedings in Carrier Sekani. Based on the authority of Standing Buffalo Dakota First Nation v. Enbridge Pipelines Inc., 2009 FCA 308, [2010] 4 F.C.R. 500, the majority of the Federal Court of Appeal in Chippewas of the Thames reasoned that the NEB  is not required to evaluate whether the Crown’s duty to consult had been triggered (or whether it was satisfied) before granting a resource project authorization, except where the Crown is a party before the NEB .

[39]                          The difficulty with this view, however, is that — as we have explained — action taken by the NEB  in furtherance of its powers under s. 5(1) (b) of COGOA  to make final decisions is itself Crown conduct which triggers the duty to consult. Nor, respectfully, can we agree with the majority of the Federal Court of Appeal in Chippewas of the Thames that an NEB  decision will comply with s. 35(1)  of the Constitution Act, 1982  so long as the NEB  ensures the proponents engage in a “dialogue” with potentially affected Indigenous groups (para. 62). If the Crown’s duty to consult has been triggered, a decision maker may only proceed to approve a project if Crown consultation is adequate. Although in many cases the Crown will be able to rely on the NEB ’s processes as meeting the duty to consult, because the NEB  is the final decision maker, the key question is whether the duty is fulfilled prior to project approval (Haida, at para. 67). Accordingly, where the Crown’s duty to consult an affected Indigenous group with respect to a project under COGOA  remains unfulfilled, the NEB  must withhold project approval. And, where the NEB  fails to do so, its approval decision should (as we have already said) be quashed on judicial review, since the duty to consult must be fulfilled prior to the action that could adversely affect the right in question (Tsilhqot’in Nation v. British Columbia, 2014 SCC 44, [2014] 2 S.C.R. 257, at para. 78).

[40]                          Some commentators have suggested that the NEB , in view of its mandate to decide issues in the public interest, cannot effectively account for Aboriginal and treaty rights and assess the Crown’s duty to consult (see R. Freedman and S. Hansen, “Aboriginal Rights vs. The Public Interest”, prepared for Pacific Business & Law Institute Conference, Vancouver, B.C. (February 26-27, 2009) (online), at pp. 4 and 14). We do not, however, see the public interest and the duty to consult as operating in conflict. As this Court explained in Carrier Sekani, the duty to consult, being a constitutional imperative, gives rise to a special public interest that supersedes other concerns typically considered by tribunals tasked with assessing the public interest (para. 70). A project authorization that breaches the constitutionally protected rights of Indigenous peoples cannot serve the public interest (ibid.).

[41]                          This leaves the question of what a regulatory agency must do where the adequacy of Crown consultation is raised before it. When affected Indigenous groups have squarely raised concerns about Crown consultation with the NEB , the NEB  must usually address those concerns in reasons, particularly in respect of project applications requiring deep consultation. Engagement of the honour of the Crown does not predispose a certain outcome, but promotes reconciliation by imposing obligations on the manner and approach of government (Haida, at paras. 49 and 63). Written reasons foster reconciliation by showing affected Indigenous peoples that their rights were considered and addressed (Haida, at para. 44). Reasons are “a sign of respect [which] displays the requisite comity and courtesy becoming the Crown as Sovereign toward a prior occupying nation” (Kainaiwa/Blood Tribe v. Alberta (Energy), 2017 ABQB 107, at para. 117 (CanLII)). Written reasons also promote better decision making (Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 S.C.R. 817, at para. 39).

[42]                          This does not mean, however, that the NEB  is always required to review the adequacy of Crown consultation by applying a formulaic “Haida analysis”, as the appellants suggest. Nor will explicit reasons be required in every case. The degree of consideration that is appropriate will depend on the circumstances of each case. But where deep consultation is required and the affected Indigenous peoples have made their concerns known, the honour of the Crown will usually oblige the NEB , where its approval process triggers the duty to consult, to explain how it considered and addressed these concerns.

E.        Was the Consultation Adequate in This Case?

[43]                          The Crown acknowledges that deep consultation was required in this case, and we agree. As this Court explained in Haida, deep consultation is required “where a strong prima facie case for the claim is established, the right and potential infringement is of high significance to the Aboriginal peoples, and the risk of non-compensable damage is high” (para. 44). Here, the appellants had established treaty rights to hunt and harvest marine mammals. These rights were acknowledged at the Federal Court of Appeal as being extremely important to the appellants for their economic, cultural, and spiritual well-being (para. 2). Jerry Natanine, the former mayor of Clyde River, explained that hunting marine mammals “provides us with nutritious food; enables us to take part in practices we have maintained for generations; and enables us to maintain close relationships with each other through the sharing of what we call ‘country food’” (A.R., vol. II, at p. 197). The importance of these rights was also recently recognized by the Nunavut Court of Justice:

The Inuit right which is of concern in this matter is the right to harvest marine mammals. Many Inuit in Nunavut rely on country food for the majority of their diet. Food costs are very high and many would be unable to purchase food to replace country food if country food were unavailable. Country food is recognized as being of higher nutritional value than purchased food. But the inability to harvest marine mammals would impact more than . . . just the diet of Inuit. The cultural tradition of sharing country food with others in the community would be lost. The opportunity to make traditional clothing would be impacted. The opportunity to participate in the hunt, an activity which is fundamental to being Inuk, would be lost. The Inuit right which is at stake is of high significance. This suggests a significant level of consultation and accommodation is required.

 

(Qikiqtani Inuit Assn. v. Canada (Minister of Natural Resources), 2010 NUCJ 12, 54 C.E.L.R. (3d) 263, at para. 25)

[44]                          The risks posed by the proposed testing to these treaty rights were also high. The NEB’s environmental assessment concluded that the project could increase the mortality risk of marine mammals, cause permanent hearing damage, and change their migration routes, thereby affecting traditional resource use. Given the importance of the rights at stake, the significance of the potential impact, and the risk of non-compensable damage, the duty owed in this case falls at the highest end of the spectrum.

[45]                          Bearing this in mind, the consultation that occurred here fell short in several respects. First, the inquiry was misdirected. While the NEB  found that the proposed testing was not likely to cause significant adverse environmental effects, and that any effects on traditional resource use could be addressed by mitigation measures, the consultative inquiry is not properly into environmental effects per se. Rather, it inquires into the impact on the right. No consideration was given in the NEB ’s environmental assessment to the source — in a treaty — of the appellants’ rights to harvest marine mammals, nor to the impact of the proposed testing on those rights.

[46]                          Furthermore, although the Crown relies on the processes of the NEB  as fulfilling its duty to consult, that was not made clear to the Inuit. The significance of the process was not adequately explained to them.

[47]                          Finally, and most importantly, the process provided by the NEB  did not fulfill the Crown’s duty to conduct deep consultation. Deep consultation “may entail the opportunity to make submissions for consideration, formal participation in the decision-making process, and provision of written reasons to show that Aboriginal concerns were considered and to reveal the impact they had on the decision” (Haida, at para. 44). Despite the NEB ’s broad powers under COGOA  to afford those advantages, limited opportunities for participation and consultation were made available to the appellants. Unlike many NEB  proceedings, including the proceedings in Chippewas of the Thames, there were no oral hearings. Although the appellants submitted scientific evidence to the NEB , this was done without participant funding. Again, this stands in contrast to Chippewas of the Thames, where the consultation process was far more robust. In that case, the NEB  held oral hearings, the appellants received funding to participate in the hearings, and they had the opportunity to present evidence and a final argument.[6] While these procedural protections are characteristic of an adversarial process, they may be required for meaningful consultation (Haida, at para. 41) and do not transform its underlying objective: fostering reconciliation by promoting an ongoing relationship (Carrier Sekani, at para. 38).

[48]                          The consultation in this case also stands in contrast to Taku River where, despite its entitlement to consultation falling only at the midrange of the spectrum (para. 32), the Taku River Tlingit First Nation, with financial assistance (para. 37), fully participated in the assessment process as a member of the project committee, which was “the primary engine driving the assessment process” (paras. 3, 8 and 40).

[49]                          While these procedural safeguards are not always necessary, their absence in this case significantly impaired the quality of consultation. Although the appellants had the opportunity to question the proponents about the project during the NEB  meetings in the spring of 2013, the proponents were unable to answer many questions, including basic questions about the effect of the proposed testing on marine mammals. The proponents did eventually respond to these questions; however, they did so in a 3,926 page document which they submitted to the NEB . This document was posted on the NEB  website and delivered to the hamlet offices in Pond Inlet, Clyde River, Qikiqtajuak and Iqaluit. Internet speed is slow in Nunavut, however, and bandwidth is expensive. The former mayor of Clyde River deposed that he was unable to download this document because it was too large. Furthermore, only a fraction of this enormous document was translated into Inuktitut. To put it mildly, furnishing answers to questions that went to the heart of the treaty rights at stake in the form of a practically inaccessible document dump months after the questions were initially asked in person is not true consultation. “‘[C]onsultation’ in its least technical definition is talking together for mutual understanding” (T. Isaac and A. Knox, “The Crown’s Duty to Consult Aboriginal People” (2003), 41 Alta. L. Rev. 49, at p. 61). No mutual understanding on the core issues — the potential impact on treaty rights, and possible accommodations — could possibly have emerged from what occurred here.

[50]                          The fruits of the Inuit’s limited participation in the assessment process here are plain in considering the accommodations recorded by the NEB ’s environmental assessment report. It noted changes made to the project as a result of consultation, such as a commitment to ongoing consultation, the placement of community liaison officers in affected communities, and the design of an Inuit Qaujimajatuqangit (Inuit traditional knowledge) study. The proponents also committed to installing passive acoustic monitoring on the ship to be used in the proposed testing to avoid collisions with marine mammals.

[51]                          These changes were, however, insignificant concessions in light of the potential impairment of the Inuit’s treaty rights. Further, passive acoustic monitoring was no concession at all, since it is a requirement of the Statement of Canadian Practice With Respect to the Mitigation of Seismic Sound in the Marine Environment which provides “minimum standards, which will apply in all non-ice covered marine waters in Canada” (A.R., vol. I, at p. 40), and which would be included in virtually all seismic testing projects. None of these putative concessions, nor the NEB ’s reasons themselves, gave the Inuit any reasonable assurance that their constitutionally protected treaty rights were considered as rights, rather than as an afterthought to the assessment of environmental concerns.

[52]                          The consultation process here was, in view of the Inuit’s established treaty rights and the risk posed by the proposed testing to those rights, significantly flawed. Had the appellants had the resources to submit their own scientific evidence, and the opportunity to test the evidence of the proponents, the result of the environmental assessment could have been very different. Nor were the Inuit given meaningful responses to their questions regarding the impact of the testing on marine life. While the NEB  considered potential impacts of the project on marine mammals and on Inuit traditional resource use, its report does not acknowledge, or even mention, the Inuit treaty rights to harvest wildlife in the Nunavut Settlement Area, or that deep consultation was required.

IV.     Conclusion

[53]                          For the foregoing reasons, we conclude that the Crown breached its duty to consult the appellants in respect of the proposed testing. We would allow the appeal with costs to the appellants, and quash the NEB ’s authorization.

                    Appeal allowed with costs.

                    Solicitors for the appellants: Stockwoods, Toronto.

                    Solicitors for the respondents Petroleum Geo‑Services Inc. (PGS), Multi Klient Invest As (MKI) and TGS‑NOPEC Geophysical Company ASA (TGS): Blake, Cassels & Graydon, Calgary.

                    Solicitor for the respondent the Attorney General of Canada: Attorney General of Canada, Saskatoon.

                    Solicitor for the intervener the Attorney General of Ontario: Attorney General of Ontario, Toronto.

                    Solicitor for the intervener the Attorney General of Saskatchewan: Attorney General of Saskatchewan, Regina.

                    Solicitors for the intervener Nunavut Tunngavik Incorporated: Woodward & Company, Victoria; Nunavut Tunngavik Incorporated, Iqaluit.

                    Solicitors for the intervener the Makivik Corporation: Dionne Schulze, Montréal.

                    Solicitors for the intervener the Nunavut Wildlife Management Board: Supreme Advocacy, Ottawa.

                    Solicitors for the intervener the Inuvialuit Regional Corporation: Inuvialuit Regional Corporation, Inuvik; Olthuis Kleer Townshend, Toronto.

                    Solicitors for the intervener the Chiefs of Ontario: Gowling WLG (Canada), Ottawa.



[1]   The judgment was amended on October 30, 2017, by adding the footnotes that now appear at paras. 31 and 47 of the English and French versions of the reasons.

[2]   This assessment was initially required under the Canadian Environmental Assessment Act, S.C. 1992, c. 37 . Since its repeal and replacement by the Canadian Environmental Assessment Act, 2012, S.C. 2012, c. 19, s. 52 , the NEB  has continued to conduct environmental assessments in relation to proposed projects, taking the position that it is still empowered to do so under COGOA .

[3]   At the time, the Department of Aboriginal Affairs and Northern Development was preparing a strategic environmental assessment — specifically, the “Eastern Arctic Strategic Environmental Assessment” — for Baffin Bay and Davis Strait, meant to examine “all aspects of future oil and gas development.” Once complete, it would “inform policy decisions around if, when, and where oil and gas companies may be invited to bid on parcels of land for exploration drilling rights in Baffin Bay/Davis Strait” (Letter to Cathy Towtongie et al. from the Honourable Bernard Valcourt, A.R., vol. IV, at pp. 966-67).

[4] National Energy Board Act, S.C. 1959, c. 46.

[5]   While s. 5.002 (participant funding) and s. 5.331 (public hearings) of COGOA  were not in force at the time the NEB  considered and authorized the project at issue here, they were added later (see S.C. 2015, c. 4, ss. 7  and 13 ).

[6]   The NEB process in Chippewas of the Thames was undertaken pursuant to the NEB Act, not COGOA . Under the NEB Act, the NEB  had at the relevant time, and still has today, explicit statutory powers to conduct public hearings (s. 24 ) and provide participant funding for such hearings (s. 16.3 ). As noted above. Parliament conferred similar powers upon the NEB  under COGOA  in 2015.

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