This article, the last in our seven part series on the Supreme Court of Canada’s recent Tsilhqot’in decision, provides an overview of the trends emerging as a result of the decision.

The Tsilhqot’in decision, in addition to being the first time an Aboriginal group has proved Aboriginal title over a significant land base in Canada, set out a number of key principles regarding the nature of Aboriginal title (which are discussed in greater detail in Part I of this series). These key principles set the stage for a fundamental shift in how the Crown, project proponents and Aboriginal groups interact when it comes to resource project development.  In this final part of our seven-part series, we discuss how this shift has been implemented in the six months post-Tsilhqot’in.

THE CROWN

Consultation and Accommodation

Six months post-Tsilhqot’in, the Crown continues to be in a state of relative permitting paralysis while it grapples with the implications of the decision. We expect that as the Crown completes its analysis of its requirements in the post-Tsilhqot’in world, it will take the position that the law established in Haida – requiring the government to consult with and, where appropriate, accommodate Aboriginal groups, but not obtain consent – remains good practice throughout the vast majority of British Columbia where Aboriginal title has not been proven.

This will undoubtedly be a significant disappointment to First Nations who are expecting a more meaningful implementation of the Tsilhqot’in decision. That said, the Crown will likely concede that its analysis of the level of consultation and accommodation required, often referred to as the strength of claim analysis, will need to be recalibrated. This will likely result in the Crown implementing an enhanced consultation and accommodation regime that acknowledges that Aboriginal title is easier to prove than the Crown previously assumed, but proceeding on the basis that, outside of the 0.18% of British Columbia currently subject to proven Aboriginal title, the consent of affected Aboriginal groups is not necessarily required for a project to proceed.

In practical terms, what this means is that while the Crown is unlikely to embrace any requirement for Aboriginal consent prior to proof of title, we will see a recalibration of the way the Crown consults and accommodates.  The Haida decision was clear that what is required by the Crown during consultation and accommodation depends on two factors: strength of claim to the Aboriginal right or title, and the degree of the impact of the proposed decision on the Aboriginal right or title.  Following Tsilhqot’in, even though the Crown may not seek Aboriginal consent in all circumstances, it will be forced to concede that many Aboriginal groups now hold a much stronger strength of claim to Aboriginal title based on the Tsilhqot’in test for proving title (see Part I for a discussion of this test).

The Treaty Process

The British Columbia Treaty Process, which has been fraught with issues even prior to Tsilhqot’in, presents an additional issue that the Crown must address in a post-Tsilhqot’in world.Throughout history, the Crown has only recognized Aboriginal title in a meaningful way for the sole purpose of extinguishing it through treaty. Tsilhqot’in changed this by providing a clear path for Aboriginal groups to have their title recognized without the need to simultaneously surrender that title to the Crown. This leaves very little incentive for Aboriginal groups to participate in the Treaty Process. In our view, the only way for the Treaty Process to continue is to transform it into a process centered on recognizing and defining Aboriginal title throughout the province. This would involve undertaking an extensive province-wide historical analysis to formally establish and recognize the boundaries of Aboriginal title. This is not an approach that the Crown is likely to take – meaning that the Treaty Process will likely remain indefinitely stalled.

PROJECT PROPONENTS

Although the Crown may technically be correct that the consultation and accommodation regime remains good law post-Tsilhqot’in, practically speaking this approach creates uncertainty – which is unwelcome by most project proponents and their financiers – in two forms:

• where Aboriginal title has not been proved, Aboriginal groups who do not consent to a project will challenge the scope of the government’s (now enhanced) duty to consult and accommodate, resulting in project delays; and
• where Aboriginal title is proved after a project has been developed without Aboriginal consent, the Crown may be forced to cancel project permits leaving the project proponent with a dead project.

In our view, the uncertainty created by the Crown’s likely response to Tsilhqot’in (as described below) will cause many project proponents to take matters into their own hands and make greater efforts to obtain Aboriginal consent prior to making a final investment decision on a project. As project proponents take greater ownership of their relationships with Aboriginal groups they will be faced with an expectation by Aboriginal groups – supported by Tsilhqot’in – for more meaningful project participation. This participation will come in various forms, including:

• adapting project features in a manner that demonstrates an understanding of the Aboriginal group’s concerns – be it through the design, operation or legacy of the project;
• including Aboriginal perspectives in project management – be it through board seats, advisory committees or actual project management roles;
• providing opportunities for the economic benefits of the project to flow to Aboriginal individuals affected by the project – be it through employment, contracting opportunities or other social and economic benefits; and
• providing opportunities for Aboriginal groups to participate as partners with the project proponent – be it through obtaining an equity, royalty or other stake in the project.

In our view, these trends will result in Aboriginal groups increasingly taking meaningful ownership and regulatory roles in respect of proposed projects in their title lands – over time potentially even resulting in projects owned primarily by Aboriginal groups and supported by industry stakeholders with minority interests. This outcome represents a stark contrast from how projects are currently developed.

ABORIGINAL GROUPS

Aboriginal groups are emerging from Tsilhqot’in emboldened and determined to have a greater say in how projects are developed in their traditional territories. Many of the trends that we see coming out of Tsilhqot’in on the Crown and project proponent side will take time to materialize – this presents an opportunity for Aboriginal groups to play an important role in determining how these trends unfold.

Territorial Governance

By clarifying that Aboriginal groups are the owner of resources on Aboriginal title land and confirming the requirement for Aboriginal consent, Tsilhqot’in presents an opportunity to establish stronger self-governance functions. As part of this process, Aboriginal groups are seeing the value in creating clear policies regarding resource development in their territories – signaling to project proponents what is expected of them in order to obtain consent and what types of projects they are willing to support. The Tsilhqot’in themselves have undertaken this exercise and are currently developing an official Mining Policy; many others, such as the Taku River Tlingit, have had these policies in place for some time. By creating new or strengthening existing resource development policies, Aboriginal groups set the tone for how project proponents seeking consent are to plan, design, construct and operate projects.

Growth of Aboriginal Business

By capitalizing on the contracting, employment and financial opportunities offered by project proponents eager to obtain consent, Aboriginal groups will be able to expand the expertise of their entrepreneurs and the capabilities of their economic development arms. Over time this will allow Aboriginal groups to undertake more complex ventures and grow their economic interests beyond their territorial borders – meaning that we expect Aboriginal businesses to continue to develop into key drivers in the Canadian economy.

Project Ownership

As project proponents seek to manage risk and build relationships by proactively seeking Aboriginal consent from groups that potentially hold title and ownership of the resources, Aboriginal groups will likely seek greater ownership status in projects. This equity proposition makes sense in at least two respects: from a proponent’s perspective, it manages risk by building strong relationships with and obtaining the consents of the potential owner and regulator of the resources, who now have some “skin in the game”; and from a First Nations perspective, it provides an opportunity to commercialize Aboriginal title without surrendering it, and provides an opportunity to meaningfully shape projects at the ownership table (instead of the consultation table).

CONCLUSION

The trends emerging post-Tsilhqot’in point towards a dramatic shift in the resource development landscape in British Columbia: (i) the Crown will attempt to maintain the status quo spurring further court battles and uncertainty, (ii) the Treaty Process will be indefinitely stalled, (iii) project proponents will actively seek and make meaningful concessions to obtain Aboriginal consent, (iv) Aboriginal groups will leverage Tsilhqot’in into more meaningful participation in and ownership of project development, and (v) Aboriginal groups will develop stronger mechanisms to govern activities in their traditional territories.

The rest of the Tsilhqot’in decision series can be found in these posts: Part I, II, III, IV, V and VI.

More Information

If you would like more information regarding the implications of the Tsilhqot’in decision or on Aboriginal law issues generally, please contact Rob Miller, Practice Group Leader for the First Nations Economic Development Group: 778-945-3060 or rob@millertiterle.com.