Introduction to Aboriginal Law in Canada

Introduction

Doing business successfully in Canada – especially in the natural resource sectors – requires strategic understanding of Canada's Aboriginal laws, which are protected by the constitution. This briefing highlights Canada’s Aboriginal law principles and strategies most relevant for industry.

 

Constitutional protection for Indigenous groups

The most fundamental principle is that Canadian governmental (or Crown) laws, decisions and policies are subject to certain constitutional protections for Indigenous groups. The constitutional protection is expressed in several short sentences in Canada’s constitution, enacted in 1982. Since then, the Supreme Court of Canada and the lower courts have provided considerable guidance, especially in cases where the Crown is asked to approve industry proposals for natural resource projects that might adversely affect Indigenous rights and interests.

 

Diversity of Indigenous interests

Constitutionally protected Indigenous interests are diverse and fall into four basic categories, each with unique implications for industry:

• Historic Treaties. The British Crown in 1763 proclaimed that colonial settlement of its North American territories (largely Canada today) should be governed by treaties with relevant Indigenous groups. To that end, 18th and 19th century treaties were concluded in most of Quebec, Ontario, Manitoba, Saskatchewan and Alberta. These treaties, in part, established reserves and confirmed signatory Indigenous groups’ rights to hunt, fish, trap and gather in defined off‑reserve territories. But the same historic treaties also affirmed the Crown right to “take up” lands for settlement purposes in off‑reserve territories. These treaty terms have been the subject of many court decisions which today serve as fundamental guidance. The “taking up” clause, for example, has been the basis for Crown approvals (sometimes with ancillary litigation) to allow agriculture, mines, forestry and oil and gas activities on lands traditionally used by Indigenous group signatories. Business proponents must inform their plans with court guidance on how far the Crown can go to “take up” lands, especially including recent decisions on how cumulative effects (not single project‑specific) could breach the Crown's treaty obligations to protect hunting, fishing, trapping and gathering rights.

• Modern‑Day Treaties. For various geopolitical reasons, the historic treaty‑making efforts did not extend to most of British Columbia and Canada's northern (Arctic) territories. But several significant energy project proposals in northern Canada in the 1970s and 1980s, together with Indigenous groups vindicating their rights in Canadian courts, prompted new treaty‑making efforts. “Modern day” treaties now exist in respect of much of Canada's northern Yukon, Northwest and Nunavut territories, northern Québec, and further areas in British Columbia, Manitoba, and Labrador. Modern treaties are more comprehensive than their historic counterparts; they include Indigenous law‑making, taxing, self‑government, real property ownership, and rights to regulate industrial activity on treaty lands. Industry proposing to carry on business activities in areas subject to Modern‑Day Treaties face unique environmental and natural resource rules not applied elsewhere in Canada.

• Aboriginal Title. Large tracts of southern Canada remain outside the scope of treaties, but industry proposing to carry on business activities in these areas must nonetheless account for proven or asserted Aboriginal title. In the past one to two decades, Indigenous groups in non‑treaty areas have obtained court affirmations that some non‑treaty Crown lands (notably in British Columbia) are subject to “Aboriginal title” (a form of real property ownership). While Aboriginal title would not empower Indigenous title holders to “veto” resource development activities, the consent of Aboriginal title holders may be required in some cases where proposed activities would unjustifiably infringe Aboriginal title. The implication for industry is clear: Indigenous groups will increasingly seek to use Aboriginal title ownership to try to regulate industry activities with their own (historically‑based) “Indigenous laws” in lieu or in addition to Canadian environmental and natural resource laws that apply generally.

• Aboriginal Rights. Industry proposing to carry on business activities in non‑treaty areas of Canada must account for proven or asserted “Aboriginal rights” of Indigenous groups to use their territories for traditional practices. These rights, compared with Aboriginal title, have lesser property‑based controls, but industry needs to recognize that Indigenous groups with strong claims to Aboriginal rights could succeed in acquiring more direct Indigenous and regulatory controls over traditionally relied‑upon resources (especially fisheries).

A further layer of diversity relevant to industry business plans arises from the fact that constitutional protection extends to three sets of Indigenous groups, namely First Nations and Metis located across Canada and the Inuit located in the central and eastern Arctic. Their broad umbrella organizations (eg Assembly of First Nations) and their individual member groups use diverse decision‑making models, often based on cultural traditions.

 

The dominant constitutional principle: Duty to “Consult and Accommodate”

Canadian Aboriginal law continues to be incrementally developed by Canadian courts applying established constitutional law principles; there is no complete “Code of Aboriginal Law” that could be applied to de‑risk resource development activities. But if there is one established and over‑arching Aboriginal law principle, it is the Crown's duty to act “honourably” in all of its dealings with Indigenous peoples. Acting “honourably” may vary contextually but will often mean that the Crown must consult with Indigenous groups in respect of how a resource proposal would affect the Indigenous interests, eg treaties, Aboriginal title and Aboriginal rights. And, if appropriate, the Crown must reasonably accommodate Indigenous interests by ensuring that governmental action is balanced to protect or preserve Indigenous interests.

Canadian courts have provided considerable guidance on the scope and content of the Crown's duty to consult Indigenous peoples. For example:

• The duty to consult is “Precautionary.” The Crown's duty to consult arises when the Crown has knowledge (real or constructive) of the potential, or asserted, existence of Indigenous interests. That is, the duty is triggered when a Crown decision has the potential to impact an Aboriginal or treaty right. The courts have imposed a low threshold to trigger a Crown duty to consult in recognition that consultation is intended to preserve Indigenous rights even where they are not yet proven.

• “Deep” consultation may be necessary. Court decisions typically consider if the Crown used a consultation process commensurate with the potentially adverse effects to a group's constitutionally protected Aboriginal interests. “Deep” consultations can be long and involved.

• Consultations focus on “Accommodations.” The courts have also stated that consultations are not simply discussions about potential concerns; they should engage whether the Crown decision (usually involving an industry application for approval) adequately accommodates Indigenous concerns.

• Industry involvement in Crown Consultation. The Crown's constitutional duty does not extend to industry proponents. But industry is not a mere observer; both the Crown and Indigenous groups expect proponents to actively facilitate the Crown's consultation when considering industry proposals. To that end the Crown may, and frequently does, require industry to engage with Indigenous peoples about how proposed activities may impact proven or asserted rights, and achieve related outcomes consistent with the Crown's duty to consult. Industry proponents often recognize that proactive engagement with Indigenous peoples is necessary for timely impact assessment and regulatory review, and that the Crown often depends on meaningful industry engagement with Indigenous peoples when the Crown in fact consults with Indigenous groups and considers accommodation measures that may be appropriate.

 

Common best practices for industry

Given the above, industry proponents commonly use several practices generally acceptable by Indigenous groups and the Crown. These include:

• Impact and Benefits Agreements (IBAs) to affirm accommodations. IBAs are typically private agreements between an industry proponent and potentially affected Indigenous groups, and typically without Crown signatories. IBAs typically govern matters including but not limited to:
  • the scope and process of consultations over a proposal (by the Crown and by industry);
  • impact mitigations to satisfy Indigenous concerns;
  • Indigenous business opportunities;
  • payment for use of Indigenous traditional territories; and
  • Indigenous undertakings to publicly consent to a subject proposal.

The Crown often defers to IBAs as reflecting adequate consultation and accommodation, provided that the proponent meets generic environmental and related requirements.

• Increased consideration of equity participation instead of IBAs. Indigenous groups, especially those with strong claims for Aboriginal title, increasingly request an equity stake in a project. Whether and how to give equity ownership to Indigenous groups may be a complex matter that varies from project to project, but there are several recognized advantages:
  • an equity stake can potentially remove or reduce the adversarial relationship with potentially affected Indigenous group(s);
  • it may be viewed by the Crown as an appropriate accommodation; and
  • as equity stake‑holders, Indigenous groups can reasonably be expected to engage with other (non‑equity) local groups to foster support for a proposal.

 

• Capacity funding. Aboriginal communities and the Crown government often expect proponents to provide funding (notably consultant, travel and per diem expenses) to support effective Indigenous participation in consultations. Such funding is not mandatory, except in several northern modern-day treaties. Without such funding, industry can expect long delays and uncertainty over regulatory approvals.

• Advance planning. Courts have ruled that consultation should be facilitated in an early, considered and transparent manner. That is, there needs to be “consultation about consultation.” For example, such early Crown planning is essential to discern who ought to be consulted and when, given that traditional and historical knowledge is often handed down through the generations by elders, who often have considerable influence in community decision‑making. Moreover, Indigenous groups use two sets of decision‑making bodies: one with jurisdiction for on‑reserve matters (usually elected) and a second responsible for off‑reserve lands (usually based on family lineage and family “sub‑territories”); these two bodies do not always agree on industry proposals, as has been evident in several recent projects. Industry often decides that it is better positioned to engage early and effectively with local Indigenous groups than leaving this to Crown bureaucracies.

• Priority attention to archaeological sites and traditional knowledge. Indigenous groups often emphasize that consultations and potential accommodations must focus on culturally and archaeologically important sites and objects. Industry proponents recognize the need to conduct archaeological, wildlife, and other studies, and provide Indigenous groups with capacity funding to review such studies).

 

Two emerging issues

Two such challenges are increasingly common for industry:

• UNDRIP and Indigenous Veto. The United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) has in recent years become subject to legislative action by Canada's Parliament and provincial legislatures. Its “prior informed consent” principle is often asserted by Indigenous groups to mean they can “veto” a project even though the Crown has satisfied its consultation and accommodation duties and industry otherwise meets legislative requirements. But as found by Canada's Supreme Court, the duty to consult and accommodate is not subject to an Indigenous veto. So, whether UNDRIP diminishes the Supreme Court of Canada no veto principle remains in doubt. This is especially where BC and other jurisdictions qualify their support of UNDRIP in aspirational but not yet binding language. Indigenous groups can nonetheless be expected to challenge Crown decisions as not fully applying UNDRIP.

• Overlapping traditional territories. To prove Aboriginal title, Indigenous groups must establish that they occupied the lands in question at the time at which the Crown asserted sovereignty over the land subject to the title. Some Indigenous peoples assert title over lands also subject to competing title claims by other Indigenous groups, and multiple groups may exercise traditional activities in common territory. As Indigenous groups may have significantly different views about an industrial proposal, the practical result is that the Crown and industry may need to engage with more than one Indigenous community about proposed resource development. Some Indigenous groups have benefit‑sharing and consultation protocols between themselves, but this is rare. Two things are imperative for industry when faced with this divisive scenario: Crown and industry should be cautious of accepting one group's views or claims as absolute or exclusive; and industry should engage early with the Crown to encourage it to proactively establish responsive processes, especially since the duty does not fall to industry.