Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council, 2010 SCC 43, [2010] 2 SCR 650

                                                 SUPREME COURT OF CANADA

Between:

Rio Tinto Alcan Inc. and

British Columbia Hydro and Power Authority

Appellants

and

Carrier Sekani Tribal Council

Respondent

‑ and ‑

Attorney General of Canada, Attorney General of Ontario,

Attorney General of British Columbia, Attorney General of Alberta,

British Columbia Utilities Commission, Mikisew Cree First Nation,

Moosomin First Nation, Nunavut Tunngavik Incorporated,

Nlaka’pamux Nation Tribal Council, Okanagan Nation Alliance,

Upper Nicola Indian Band, Lakes Division of the Secwepemc Nation,

Assembly of First Nations, Standing Buffalo Dakota First Nation,

First Nations Summit, Duncan’s First Nation,

Horse Lake First Nation, Independent Power Producers Association

of British Columbia, Enbridge Pipelines Inc. and

TransCanada Keystone Pipeline GP Ltd.

Interveners

Coram: McLachlin C.J. and Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell JJ.

______________________________

Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council, 2010 SCC 43, [2010] 2 S.C.R. 650

Rio Tinto Alcan Inc. and

British Columbia Hydro and Power Authority                                                                 Appellants

v.

Carrier Sekani Tribal Council                                                                                        Respondent

and

Attorney General of Canada,

Attorney General of Ontario,

Attorney General of British Columbia,

Attorney General of Alberta,

British Columbia Utilities Commission,

Mikisew Cree First Nation,

Moosomin First Nation,

Nunavut Tunngavik Inc.,

Nlaka’pamux Nation Tribal Council,

Okanagan Nation Alliance,

Upper Nicola Indian Band,

Lakes Division of the Secwepemc Nation,

Assembly of First Nations,

Standing Buffalo Dakota First Nation,

First Nations Summit,

Duncan’s First Nation,

Horse Lake First Nation,

Independent Power Producers Association of British Columbia,

Enbridge Pipelines Inc. and

TransCanada Keystone Pipeline GP Ltd.                                                                      Interveners

Indexed as:  Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council

2010 SCC 43

File No.:  33132.

2010:  May 21; 2010:  October 28.

Present:  McLachlin C.J. and Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell JJ.

on appeal from the court of appeal for british columbia

Constitutional law — Honour of the Crown — Aboriginal peoples — Aboriginal rights — Right to consultation — British Columbia authorized project altering timing and flow of water in area claimed by First Nations without consulting affected First Nations — Thereafter, provincial hydro and power authority sought British Columbia Utilities Commission’s approval of agreement to purchase power generated by project from private producer — Duty to consult arises when Crown knows of potential Aboriginal claim or right and contemplates conduct that may adversely affect it — Whether Commission reasonably declined to consider adequacy of consultation in context of assessing whether agreement is in public interest — Whether duty to consult arose — What constitutes “adverse effect” — Constitution Act, 1982, s. 35  — Utilities Commission Act, R.S.B.C. 1996, c. 473, s. 71.

Administrative law — Boards and tribunals — Jurisdiction — British Columbia authorized project altering timing and flow of water in area claimed by First Nations without consulting affected First Nations — Thereafter, provincial hydro and power authority sought British Columbia Utilities Commission’s approval of agreement to purchase power generated by project from private producer — Commission empowered to decide questions of law and to determine whether agreement is in public interest — Whether Commission had jurisdiction to discharge Crown’s constitutional obligation to consult — Whether Commission had jurisdiction

to consider adequacy of consultation — If so, whether it was required to consider adequacy of consultation in determining whether agreement is in public interest — Constitution Act, 1982, s. 35  — Utilities Commission Act, R.S.B.C. 1996, c. 473, s. 71.

In the 1950s, the government of British Columbia authorized the building of a dam and reservoir which altered the amount and timing of water flows in the Nechako River.  The First Nations claim the Nechako Valley as their ancestral homeland, and the right to fish in the Nechako River, but, pursuant to the practice at the time, they were not consulted about the dam project.

Since 1961, excess power generated by the dam has been sold by Alcan to BC Hydro under Energy Purchase Agreements (“EPAs”) which commit Alcan to supplying and BC Hydro to purchasing excess electricity.  The government of British Columbia sought the Commission’s approval of the 2007 EPA.  The First Nations asserted that the 2007 EPA should be subject to consultation under s. 35  of the Constitution Act, 1982 .

The Commission accepted that it had the power to consider the adequacy of consultation with Aboriginal groups, but found that the consultation issue could not arise because the 2007 EPA would not adversely affect any Aboriginal interest.  The British Columbia Court of Appeal reversed the Commission’s orders and remitted the case to the Commission for evidence and argument on whether a duty to consult the First Nations exists and, if so, whether it had been met.  Alcan and BC Hydro appealed.

Held:  The appeal should be allowed and the decision of the British Columbia Utilities Commission approving the 2007 EPA should be confirmed.

The Commission did not act unreasonably in approving the 2007 EPA.  Governments have a duty to consult with Aboriginal groups when making decisions which may adversely impact lands and resources to which Aboriginal peoples lay claim.  The duty to consult is grounded in the honour of the Crown and is a corollary of the Crown’s obligation to achieve the just settlement of Aboriginal claims through the treaty process.  While the treaty claims process is ongoing, there is an implied duty to consult with Aboriginal claimants on matters that may adversely affect their treaty and Aboriginal rights, and to accommodate those interests in the spirit of reconciliation.  The duty has both a legal and a constitutional character, and is prospective, fastening on rights yet to be proven.  The nature of the duty and the remedy for its breach vary with the situation.

The duty to consult arises when the Crown has knowledge, real or constructive, of the potential existence of the Aboriginal right or title and contemplates conduct that might adversely affect it.  This test can be broken down into three elements.  First, the Crown must have real or constructive knowledge of a potential Aboriginal claim or right.  While the existence of a potential claim is essential, proof that the claim will succeed is not.  Second, there must be Crown conduct or a Crown decision.  In accordance with the generous, purposive approach that must be brought to the duty to consult, the required  decision or conduct is not confined to government exercise of statutory powers or to decisions or conduct which have an immediate impact on lands and resources.  The duty to consult extends to “strategic, higher level decisions” that may have an impact on Aboriginal claims and rights.  Third, there must be a possibility that the Crown conduct may affect the Aboriginal claim or right.  The claimant must show a causal relationship between the proposed government conduct or decision and a potential for adverse impacts on pending Aboriginal claims or rights.  Past wrongs, speculative impacts, and adverse effects on a First Nation’s future negotiating position will not suffice.  Moreover, the duty to consult is confined to the adverse impacts flowing from the current government conduct or decision, not to larger adverse impacts of the project of which it is a part.  Where the resource has long since been altered and the present government conduct or decision does not have any further impact on the resource, the issue is not consultation, but negotiation about compensation.

Tribunals are confined to the powers conferred on them by their constituent legislation, and the role of particular tribunals in relation to consultation depends on the duties and powers the legislature has conferred on them.  The legislature may choose to delegate the duty to consult to a tribunal, and it may empower the tribunal to determine whether adequate consultation has taken place.

The power to engage in consultation itself, as distinct from the jurisdiction to determine whether a duty to consult exists, cannot be inferred from the mere power to consider questions of law.  Consultation itself is not a question of law; it is a distinct, often complex, constitutional process and, in certain circumstances, a right involving facts, law, policy, and compromise.  The tribunal seeking to engage in consultation must be expressly or impliedly empowered to do so and its enabling statute must give it the necessary remedial powers.

The duty to consult is a constitutional duty invoking the honour of the Crown.  It must be met.  If the tribunal structure set up by the legislature is incapable of dealing with a decision’s potential adverse impacts on Aboriginal interests, then the Aboriginal peoples affected must seek appropriate remedies in the courts.  These remedies have proven time‑consuming and expensive, are often ineffective, and serve the interest of no one.

In this case, the Commission had the power to consider whether adequate consultation had taken place.  The Utilities Commission Act empowered it to decide questions of law in the course of determining whether an EPA is in the public interest, which implied a power to decide constitutional issues properly before it.  At the time, it also required the Commission to consider “any other factor that the commission considers relevant to the public interest”, including the adequacy of consultation.  This conclusion is not altered by the Administrative Tribunals Act, which provides that a tribunal does not have jurisdiction over any “constitutional question”, since the application for reconsideration does not fall within the narrow statutory definition of that term.

The Legislature did not delegate the Crown’s duty to consult to the Commission.  The Commission’s power to consider questions of law and matters relevant to the public interest does not empower it to engage in consultation because consultation is a distinct constitutional process, not a question of law.

The Commission correctly accepted that it had the power to consider the adequacy of consultation with Aboriginal groups, and reasonably concluded that the consultation issue could not arise because the 2007 EPA would not adversely affect any Aboriginal interest.  In this case, the Crown had knowledge of a potential Aboriginal claim or right and BC Hydro’s proposal to enter into an agreement to purchase electricity from Alcan is clearly proposed Crown conduct.  However, the 2007 EPA would have neither physical impacts on the Nechako River or the fishery nor organizational, policy or managerial impacts that might adversely affect the claims or rights of the First Nations.  The failure to consult on the initial project was an underlying infringement, and was not sufficient to trigger a duty to consult.  Charged with the duty to act in accordance with the honour of Crown, BC Hydro’s representatives will nevertheless be required to take into account and consult as necessary with affected Aboriginal groups insofar as any decisions taken in the future have the potential to adversely affect them.

Cases Cited

Followed:  Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73, [2004] 3 S.C.R. 511; referred to:  R. v. Kapp, 2008 SCC 41, [2008] 2 S.C.R. 483; Taku River Tlingit First Nation v. British Columbia (Project Assessment Director), 2004 SCC 74, [2004] 3 S.C.R. 550; Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage), 2005 SCC 69, [2005] 3 S.C.R. 388; Huu‑Ay‑Aht First Nation v. British Columbia (Minister of Forests), 2005 BCSC 697, [2005] 3 C.N.L.R. 74; Wii’litswx v. British Columbia (Minister of Forests), 2008 BCSC 1139, [2008] 4 C.N.L.R. 315; Klahoose First Nation v. Sunshine Coast Forest District (District Manager), 2008 BCSC 1642, [2009] 1 C.N.L.R. 110; Dene Tha’ First Nation v. Canada (Minister of Environment), 2006 FC 1354, [2007] 1 C.N.L.R. 1, aff’d 2008 FCA 20, 35 C.E.L.R. (3d) 1; An Inquiry into British Columbia’s Electricity Transmission Infrastructure & Capacity Needs for the Next 30 Years, Re, 2009 CarswellBC 3637; R. v. Lefthand, 2007 ABCA 206, 77 Alta. L.R. (4th) 203; R. v. Douglas, 2007 BCCA 265, 278 D.L.R. (4th) 653; R. v. Conway, 2010 SCC 22, [2010] 1 S.C.R. 765; Canada (Citizenship and Immigration) v. Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339; Paul v. British Columbia (Forest Appeals Commission), 2003 SCC 55, [2003] 2 S.C.R. 585; Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190.

Statutes and Regulations Cited

Administrative Tribunals Act, S.B.C. 2004, c. 45, ss. 1, 44(1), 58.

Constitution Act, 1867 , s. 91(12) .

Constitution Act, 1982 , ss. 24 , 35 , 52 .

Constitutional Question Act, R.S.B.C. 1996, c. 68, s. 8.

Utilities Commission Act, R.S.B.C. 1996, c. 473, ss. 2(4), 71, 79, 101(1), 105.

Authors Cited

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

Slattery, Brian.  “Aboriginal Rights and the Honour of the Crown” (2005), 29 S.C.L.R. (2d) 433.

Woodward, Jack.  Native Law, vol. 1. Toronto:  Carswell, 1994 (loose‑leaf updated 2010, release 4).

APPEAL from a judgment of the British Columbia Court of Appeal (Donald, Huddart and Bauman JJ.A.), 2009 BCCA 67, 89 B.C.L.R. (4th) 298, 266 B.C.A.C. 228, 449 W.A.C. 228, [2009] 2 C.N.L.R. 58, [2009] 4 W.W.R. 381, 76 R.P.R. (4th) 159, [2009] B.C.J. No. 259 (QL), 2009 CarswellBC 340, allowing an appeal from a decision of the British Columbia Utilities Commission, 2008 CarswellBC 1232, and remitting the consultation issue to the Commission.  Appeal allowed; decision of the British Columbia Utilities Commission approving 2007 EPA confirmed.

Daniel A. Webster, Q.C., David W. Bursey and Ryan D. W. Dalziel, for the appellant Rio Tinto Alcan Inc.

Chris W. Sanderson, Q.C., Keith B. Bergner and Laura Bevan, for the appellant the British Columbia Hydro and Power Authority.

Gregory J. McDade, Q.C., and Maegen M. Giltrow, for the respondent.

Mitchell R. Taylor, Q.C., for the intervener the Attorney General of Canada.

Malliha Wilson and Tamara D. Barclay, for the intervener the Attorney General of Ontario.

Paul E. Yearwood, for the intervener the Attorney General of British Columbia.

Stephanie C. Latimer, for the intervener the Attorney General of Alberta.

Written submissions only by Gordon A. Fulton, Q.C., for the intervener the British Columbia Utilities Commission.

Written submissions only by Robert C. Freedman and Rosanne M. Kyle, for the intervener the Mikisew Cree First Nation.

Written submissions only by Jeffrey R. W. Rath and Nathalie Whyte, for the intervener the Moosomin First Nation.

Richard Spaulding, for the intervener Nunavut Tunngavik Inc.

Written submissions only by Timothy Howard and Bruce Stadfeld, for the interveners the Nlaka’pamux Nation Tribal Council, the Okanagan Nation Alliance and the Upper Nicola Indian Band.

Robert J. M. Janes, for the intervener the Lakes Division of the Secwepemc Nation.

Peter W. Hutchins and David Kalmakoff, for the intervener the Assembly of First Nations.

Written submissions only by Mervin C. Phillips, for the intervener the Standing Buffalo Dakota First Nation.

Arthur C. Pape and Richard B. Salter, for the intervener the First Nations Summit.

Jay Nelson, for the interveners the Duncan’s First Nation and the Horse Lake First Nation.

Roy W. Millen, for the intervener the Independent Power Producers Association of British Columbia.

Written submissions only by Harry C. G. Underwood, for the intervener Enbridge Pipelines Inc.

Written submissions only by C. Kemm Yates, Q.C., for the intervener the TransCanada Keystone Pipeline GP Ltd.

The judgment of the Court was delivered by

[1]     The Chief Justice — In the 1950s, the government of British Columbia authorized the building of the Kenney Dam in Northwest British Columbia for the production of hydro power for the smelting of aluminum.  The dam and reservoir altered the water flows to the Nechako River, which the Carrier Sekani Tribal Council (“CSTC”) First Nations have since time immemorial used for fishing and sustenance.  This was done without consulting with the CSTC First Nations.  Now, the government of British Columbia seeks approval of a contract for the sale of excess power from the dam to British Columbia Hydro and Power Authority (“BC Hydro”), a Crown corporation.  The question is whether the British Columbia Utilities Commission (the “Commission”) is required to consider the issue of consultation with the CSTC First Nations in determining whether the sale is in the public interest.

[2]     In Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73, [2004] 3 S.C.R. 511, this Court affirmed that governments have a duty to consult with Aboriginal groups when making decisions which may adversely impact lands and resources to which Aboriginal peoples lay claim.  In the intervening years, government-Aboriginal consultation has become an important part of the resource development process in British Columbia especially; much of the land and resources there are subject to land claims negotiations.  This case raises the issues of what triggers a duty to consult, and the place of government tribunals in consultation and the review of consultation.  I would allow the appeal, while affirming the duty of BC Hydro to consult the CSTC First Nations on future developments that may adversely affect their claims and rights.

I.       Background

A.     The Facts

[3]     In the 1950s, Alcan (now Rio Tinto Alcan) dammed the Nechako River in northwestern British Columbia for the purposes of power development in connection with aluminum production.  The project was one of huge magnitude. It diverted water from the Nechako River into the Nechako Reservoir, where a powerhouse was installed for the production of electricity.  After passing through the turbines of the powerhouse, the water flowed to the Kemano River and on to the Pacific Ocean to the west.  The dam affected the amount and timing of water flows into the Nechako River to the east, impacting fisheries on lands now claimed by the CSTC First Nations. Alcan effected these water diversions under Final Water Licence No. 102324 which gives Alcan use of the water on a permanent basis.

[4]     Alcan, the Province of British Columbia, and Canada entered into a Settlement Agreement in 1987 on the release of waters in order to protect fish stocks. Canada was involved because fisheries, whether seacoast-based or inland, fall within federal jurisdiction under s. 91(12)  of the Constitution Act, 1867 .  The 1987 agreement directs the release of additional flows in July and August to protect migrating salmon.  In addition, a protocol has been entered into between the Haisla Nation and Alcan which regulates water flows to protect eulachon spawning grounds.

[5]     The electricity generated by the project has been used over the years primarily for aluminum smelting.  Since 1961, however, Alcan has sold its excess power to BC Hydro, a Crown Corporation, for use in the local area and later for transmission to neighbouring communities. The Energy Purchase Agreement (“EPA”) entered into in 2007, which is the subject of this appeal is the latest in a series of power sales from Alcan to BC Hydro.  It commits Alcan to supplying and BC Hydro to purchasing excess electricity from the Kemano site until 2034.  The 2007 EPA establishes a Joint Operating Committee to advise the parties on the administration of the EPA and the operation of the reservoir.

[6]     The CSTC First Nations claim the Nechako Valley as their ancestral homeland, and the right to fish in the Nechako River.  As was the practice at the time, they were not consulted about the diversion of the river effected by the 1950s dam project.  They assert, however, that the 2007 EPA for the power generated by the project should be subject to consultation.  This, they say, is their constitutional right under s. 35  of the Constitution Act, 1982 , as defined in Haida Nation.

B.      The Commission Proceedings

[7]     The 2007 EPA was subject to review before the Commission.  It was charged with determining whether the sale of electricity was in the public interest under s. 71 of the Utilities Commission Act, R.S.B.C. 1996, c. 473.  The Commission had the power to declare a contract for the sale of electricity unenforceable if it found that it was not in the public interest having regard to the quantity of energy to be supplied, the availability of supplies, the price and availability of any other form of energy, the price of the energy supplied to a public utility company, and “any other factor that the commission considers relevant to the public interest”.

[8]     The Commission began its work by holding two procedural conferences to determine, among other things, the “scope” of its hearing. “Scoping” is the process by which the Commission determines what “information it considers necessary to determine whether the contract is in the public interest” pursuant to s. 71(1)(b) of the Utilities Commission Act.  The question of the role of First Nations in the proceedings arose at this stage. The CSTC was not party to the proceedings but the Haisla Nation was.  The Haisla people submitted that the Province and BC Hydro “ha[d] failed to act on their legal obligation” to them, but refrained from asking the Commission “to assess the adequacy [of consultation] and accommodation afforded . . . on the 2007 EPA”:  Re: British Columbia Hydro & Power Authority Filing of Electricity Purchase Agreement with Alcan Inc. as an Energy Supply Contract Pursuant to Section 71, British Columbia Utilities Commission, October 10, 2007 (the “Scoping Order”), unreported.  The Commission’s Scoping Order therefore addressed the consultation issue as follows:

Evidence relevant to First Nations consultation may be relevant for the same purpose that the Commission often considers evidence of consultation with other stakeholders. Generally, insufficient evidence of consultation, including with First Nations is not determinative of matters before the Commission.

[9]     On October 29, 2007, the CSTC requested late intervener status on the issue of consultation on the basis that the Commission’s decision might negatively impact Aboriginal rights and title which were the subject of its ongoing land claims.  At the opening of the oral hearing on November 19, 2007, the CSTC applied for reconsideration of the Scoping Order and, in written submissions of November 20, 2007, it asked the Commission to include in the hearing’s scope the issues of whether the duty to consult had been met, whether the proposed power sale under the 2007 EPA could constitute an infringement of Aboriginal rights and title in and of itself, and the related issue of the environmental impact of the 2007 EPA on the rights of the CSTC First Nations.

[10] The Commission established a two-stage process to consider the CSTC’s application for reconsideration of the Scoping Order: an initial screening phase to determine whether there was a reasonable evidentiary basis for reconsideration, and a second phase to receive arguments on whether the rescoping application should be granted.  At the first stage, the CSTC filed evidence, called witnesses and cross-examined the witnesses of BC Hydro and Alcan.  The Commission confined the proceedings to the question of whether the 2007 EPA would adversely affect potential CSTC First Nations’ interests by causing changes in water flows into the Nechako River or changes in water levels of the Nechako Reservoir.

[11] On November 29, 2007, the Commission issued a preliminary decision on the Phase I process called “Impacts on Water Flows”.  It concluded that the “responsibility for operation of the Nechako Reservoir remains with Alcan under the 2007 EPA”, and that the EPA would not affect water levels in the Nechako River stating,  “the 2007 EPA sets the priority of generation produced but does not set the priority for water”.  With or without the 2007 EPA, “Alcan operates the Nechako Reservoir to optimize power generation”.

[12] As to fisheries, the Commission stated that “the priority of releases from the Nechako Reservoir [under the 1987 Settlement Agreement] is first to fish flows and second to power service”.  While the timing of water releases from the Nechako Reservoir for power generation purposes may change as a result of the 2007 EPA, that change “will have no impact on the releases into the Nechako river system”.  This is because water releases for power generation flow not into the Nechako River system to the east, with which the CSTC First Nations are concerned, but into the Kemano River to the west.   Nor, the Commission found, would the 2007 EPA bring about a change in control over water flows and water levels, or alter the management structure of the reservoir.

[13] The Commission then embarked on Phase II of the rescoping hearing and invited the parties to make written submissions on the reconsideration application — specifically, on whether it would be a jurisdictional error not to revise the Scoping Order to encompass consultation issues on these facts.  The parties did so.

[14] On December 17, 2007, the Commission dismissed the CSTC’s application for reconsideration of the scoping order on grounds that the 2007 EPA would not introduce new adverse effects to the interests of the First Nations:    Re British Columbia Hydro & Power Authority, 2008 CarswellBC 1232 (B.C.U.C.) (the “Reconsideration Decision”). For the purposes of the motion, the Commission assumed the historic infringement of Aboriginal rights, Aboriginal title, and a failure by the government to consult.  Referring to Haida Nation, it concluded that “more than just an underlying infringement” was required. The CSTC had to demonstrate that the 2007 EPA would “adversely affect” the Aboriginal interests of its member First Nations.  Applying this test to its findings of fact, it stated that “a section 71 review does not approve, transfer or change control of licenses or authorization and therefore where there are no new physical impacts acceptance of a section 71 filing [without consultation] would not be a jurisdictional error”.  The Commission therefore concluded that its decision on the 2007 EPA would have no adverse effects on the CSTC First Nations’ interests.  The duty to consult was therefore not triggered, and no jurisdictional error was committed in failing to include consultation with the First Nations in the Scoping Order beyond the general consultation extended to all stakeholders.

[15] The Commission went on to conclude that the 2007 EPA was in the public interest and should be accepted.  It stated:

In the circumstances of this review, evidence regarding consultation with respect to the historical, continuing infringement can reasonably be expected to be of no assistance for the same reasons there is no jurisdictional error, that is, the limited scope of the section 71 review, and there are no new physical impacts.

[16] In essence, the Commission took the view that the 2007 EPA would have no physical impact on the existing water levels in the Nechako River and hence it would not change the current management of its fishery. The Commission further found that its  decision would not involve any transfer or change in the project’s licences or operations. Consequently, the Commission concluded that its decision would have no adverse impact on the pending claims or rights of the CSTC First Nations such that there was no need to rescope the hearing to permit further argument on the duty to consult.

C.     The Judgment of the Court of Appeal, 2009 BCCA 67, 89 B.C.L.R. (4th) 298 (Donald, Huddart and Bauman JJ.A.)

[17] The CSTC appealed the Reconsideration Decision and the approval of the 2007 EPA to the British Columbia Court of Appeal.  The Court, per Donald J.A., reversed the Commission’s orders and remitted the case back to the Commission for “evidence and argument on whether a duty to consult and, if necessary, accommodate the [CSTC First Nations] exists and, if so, whether the duty has been met in respect of the filing of the 2007 EPA” (para. 69).

[18] The Court of Appeal found that the Commission had jurisdiction to consider the issue of consultation. The Commission had the power to decide questions of law, and hence constitutional issues relating to the duty to consult.

[19] The Court of Appeal went on to hold that the Commission acted prematurely by rejecting the application for reconsideration.  Donald J.A., writing for the Court, stated:

. . . the Commission wrongly decided something as a preliminary matter which properly belonged in a hearing of the merits.  The logic flaw was in predicting that consultation could have produced no useful outcome.  Put another way, the Commission required a demonstration that the [CSTC] would win the point as a precondition for a hearing into the very same point.

I do not say that the Commission would be bound to find a duty to consult here.  The fault in the Commission’s decision is in not entertaining the issue of consultation within the scope of a full hearing when the circumstances demanded an inquiry. [paras. 61-62]

[20] The Court of Appeal held that the honour of the Crown obliged the Commission to decide the consultation issue, and that “the tribunal with the power to approve the plan must accept the responsibility to assess the adequacy of consultation” (para. 53).  Unlike the Commission, the Court of Appeal did not consider whether the 2007 EPA was capable of having an adverse impact on a pending claim or right of the CSTC First Nations.  The Court of Appeal did not criticize the Commission’s adverse impacts finding.  Rather, it appears to have concluded that despite these findings, the Commission was obliged to consider whether consultation could be “useful”. In finding that the Commission should have considered the consultation issue, the Court of Appeal appears to have taken a broader view than did the Commission as to when a duty to consult may arise.

[21] The Court of Appeal suggested that a failure to consider consultation risked the approval of a contract in breach of the Crown’s constitutional duty.  Donald J.A. asked, “How can a contract formed by a Crown agent in breach of a constitutional duty be in the public interest? The existence of such a duty and the allegation of the breach must form part and parcel of the public interest inquiry” (para. 42).

[22] Alcan and BC Hydro appeal to this Court.  They argue that the Court of Appeal took too wide a view of the Crown’s duty to consult and of the role of tribunals in deciding consultation issues.  In view of the Commission’s task under its constituent statute and the evidence before it, Alcan and BC Hydro submit that the Commission correctly concluded that it had no duty to consider the consultation issue raised by the CSTC, since, however much participation was accorded, there was no possibility of finding a duty to consult with respect to the 2007 EPA.

[23] The CSTC argues that the Court of Appeal correctly held that the Commission erred in refusing to rescope its proceeding to allow submissions on the consultation issue.  It does not pursue earlier procedural arguments in this Court.

II.      The Legislative Framework

A.     Legislation Regarding the Public Interest Determination

[24] The 2007 EPA was subject to review before the Commission under the authority of s. 71 of the Utilities Commission Act to determine whether it was in the public interest.  Prior to May 2008, this determination was to be based on the quantity of energy to be supplied; the availability of supplies; the price and availability of any other form of energy; the price of the energy supplied to a public utility company; and “any other factor that the commission considers relevant to the public interest”: Utilities Commission Act, s. 71(2)(a) to (e).  Effective May 2008, these considerations were expanded to include “the government’s energy objectives” and its long-term resource plans: s. 71(2.1)(a) and (b). The public interest clause, however, was narrowed to considerations of the interests of potential British Columbia public utility customers: s. 71(2.1)(d).

B.      Legislation on the Commission’s Remedial Powers

[25] Based on the above considerations, the Commission may issue an order approving the proposed contract under s. 71(2.4) of the Utilities Commission Act if it is found to be in the public interest. If it is not found to be in the public interest, the Commission can issue an order declaring the contract unenforceable, either wholly or in part, or “make any other order it considers advisable in the circumstances”: s. 71(2) and (3).

C.     Legislation on the Commission’s Jurisdiction and Appeals

[26] Section 79 of the Utilities Commission Act states that all findings of fact made by the Commission within its jurisdiction are “binding and conclusive”. This is supplemented by s. 105 which grants the Commission “exclusive jurisdiction in all cases and for all matters in which jurisdiction is conferred on it by this or any other Act”. An appeal, however, lies from a decision or order of the Commission to the Court of Appeal with leave: s. 101(1).

[27] Together, ss. 79 and 105 of the Utilities Commission Act constitute a “privative clause” as defined in s. 1 of the British Columbia Administrative Tribunals Act, S.B.C. 2004, c. 45. Under s. 58 of the Administrative Tribunals Act, this privative clause attracts a “patently unreasonable” standard of judicial review to “a finding of fact or law or an exercise of discretion by the tribunal in respect of a matter over which it has exclusive jurisdiction under a privative clause”;  a standard of correctness is to be applied in the review of “all [other] matters”.

[28] The jurisdiction of the commission is also arguably affected by s. 44(1) of the Administrative Tribunals Act which applies to the Commission by virtue of s. 2(4) of the Utilities Commission Act.  Section 44(1) of the Administrative Tribunals Act states that “[t]he tribunal does not have jurisdiction over constitutional questions”. A “constitutional question” is defined in s. 1 of the Administrative Tribunals Act by s. 8 of the Constitutional Question Act, R.S.B.C. 1996, c. 68.  Section 8(2) says:

8. . . .

(2)       If in a cause, matter or other proceeding

(a)       the constitutional validity or constitutional applicability of any law is challenged, or

(b)       an application is made for a constitutional remedy,

the law must not be held to be invalid or inapplicable and the remedy must not be granted until after notice of the challenge or application has been served on the Attorney General of Canada and the Attorney General of British Columbia in accordance with this section.

A “constitutional remedy” is defined as “a remedy under section 24(1)  of the Canadian Charter of Rights and Freedoms  other than a remedy consisting of the exclusion of evidence or consequential on such exclusion”: Constitutional Question Act, s. 8(1).

D.     Section 35  of the Constitution Act, 1982 

[29] Section 35  of the Constitution Act, 1982  reads:

35. (1) The existing aboriginal and treaty rights of the aboriginal peoples of Canada are hereby recognized and affirmed.

(2)       In this Act, “aboriginal peoples of Canada” includes the Indian, Inuit and Métis peoples of Canada.

(3)       For greater certainty, in subsection (1) “treaty rights” includes rights that now exist by way of land claims agreements or may be so acquired.

(4)       Notwithstanding any other provision of this Act, the aboriginal and treaty rights referred to in subsection (1) are guaranteed equally to male and female persons.

III.    The Issues

[30] The main issues that must be resolved are: (1) whether the Commission had jurisdiction to consider consultation; and (2) if so, whether the Commission’s refusal to rescope the inquiry to consider consultation should be set aside.  In order to resolve these issues, it is necessary to consider when a duty to consult arises and the role of tribunals in relation to the duty to consult.  These reasons will therefore consider:

1.                When a duty to consult arises;

2.                The role of tribunals in consultation;

3.                The Commission’s jurisdiction to consider consultation;

4.                The Commission’s Reconsideration Decision;

5.                The Commission’s conclusion that approval of the 2007 EPA was in the public interest.

IV.    Analysis

A.     When Does the Duty to Consult Arise?

[31] The Court in Haida Nation answered this question as follows: the duty to consult arises “when the Crown has knowledge, real or constructive, of the potential existence of the Aboriginal right or title and contemplates conduct that might adversely affect it” (para. 35). This test can be broken down into three elements: (1) the Crown’s knowledge, actual or constructive, of a potential Aboriginal claim or right; (2) contemplated Crown conduct; and (3) the potential that the contemplated conduct may adversely affect an Aboriginal claim or right.  I will discuss each of these elements in greater detail. First, some general comments on the source and nature of the duty to consult are in order. 

[32] The duty to consult is grounded in the honour of the Crown.  It is a corollary of the Crown’s obligation to achieve the just settlement of Aboriginal claims through the treaty process.  While the treaty claims process is ongoing, there is an implied duty to consult with the Aboriginal claimants on matters that may adversely affect their treaty and Aboriginal rights, and to accommodate those interests in the spirit of reconciliation: Haida Nation, at para. 20. As stated in Haida Nation, at para. 25:

Put simply, Canada’s Aboriginal peoples were here when Europeans came, and were never conquered.  Many bands reconciled their claims with the sovereignty of the Crown through negotiated treaties.  Others, notably in British Columbia, have yet to do so. The potential rights embedded in these claims are protected by s. 35  of the Constitution Act, 1982 .  The honour of the Crown requires that these rights be determined, recognized and respected.  This, in turn, requires the Crown, acting honourably, to participate in processes of negotiation.  While this process continues, the honour of the Crown may require it to consult and, where indicated, accommodate Aboriginal interests.

[33] The duty to consult described in Haida Nation derives from the need to protect Aboriginal interests while land and resource claims are ongoing or when the proposed action may impinge on an Aboriginal right.  Absent this duty, Aboriginal groups seeking to protect their interests pending a final settlement would need to commence litigation and seek interlocutory injunctions to halt the threatening activity.  These remedies have proven time-consuming, expensive, and are often ineffective. Moreover, with a few exceptions, many Aboriginal groups have limited success in obtaining injunctions to halt development or activities on the land in order to protect contested Aboriginal or treaty rights.

[34] Grounded in the honour of the Crown, the duty has both a legal and a constitutional character: R. v. Kapp, 2008 SCC 41, [2008] 2 S.C.R. 483, at para. 6. The duty seeks to provide protection to Aboriginal and treaty rights while furthering the goals of reconciliation between Aboriginal peoples and the Crown.  Rather than pitting Aboriginal peoples against the Crown in the litigation process, the duty recognizes that both must work together to reconcile their interests.  It also accommodates the reality that often Aboriginal peoples are involved in exploiting the resource. Shutting down development by court injunction may serve the interest of no one.  The honour of the Crown is therefore best reflected by a requirement for consultation with a view to reconciliation.

[35] Haida Nation sets the framework for dialogue prior to the final resolution of claims by requiring the Crown to take contested or established Aboriginal rights into account before making a decision that may have an adverse impact on them:  J. Woodward, Native Law, vol. 1 (loose-leaf), at p. 5-35.  The duty is prospective, fastening on rights yet to be proven.

[36] The nature of the duty varies with the situation. The richness of the required consultation increases with the strength of the prima facie Aboriginal claim and the seriousness of the impact on the underlying Aboriginal or treaty right: Haida Nation, at paras. 43‑45, and Taku River Tlingit First Nation v. British Columbia (Project Assessment Director), 2004 SCC 74, [2004] 3 S.C.R. 550, at para. 32.

[37] The remedy for a breach of the duty to consult also varies with the situation. The Crown’s failure to consult can lead to a number of remedies ranging from injunctive relief against the threatening activity altogether, to damages, to an order to carry out the consultation prior to proceeding further with the proposed government conduct: Haida Nation, at paras. 13‑14.

[38] The duty to consult embodies what Brian Slattery has described as a “generative” constitutional order which sees “section 35 as serving a dynamic and not simply static function” (“Aboriginal Rights and the Honour of the Crown” (2005), 29 S.C.L.R. (2d) 433, at p. 440).  This dynamicism was articulated in Haida Nation as follows, at para. 32:

. . . the duty to consult and accommodate is part of a process of fair dealing and reconciliation that begins with the assertion of sovereignty and continues beyond formal claims resolution.  Reconciliation is not a final legal remedy in the usual sense.  Rather, it is a process flowing from rights guaranteed by s. 35(1)  of the Constitution Act, 1982 .

As the post‑Haida Nation case law confirms, consultation is “[c]oncerned with an ethic of ongoing relationships” and seeks to further an ongoing process of reconciliation by articulating a preference for remedies “that promote ongoing negotiations”: D. G. Newman, The Duty to Consult: New Relationships with Aboriginal Peoples (2009), at p. 21.

[39] Against this background, I now turn to the three elements that give rise to a duty to consult.

(1)   Knowledge by the Crown of a Potential Claim or Right

[40] To trigger the duty to consult, the Crown must have real or constructive knowledge of a claim to the resource or land to which it attaches: Haida Nation, at para. 35. The threshold, informed by the need to maintain the honour of the Crown, is not high. Actual knowledge arises when a claim has been filed in court or advanced in the context of negotiations, or when a treaty right may be impacted: Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage), 2005 SCC 69, [2005] 3 S.C.R. 388, para. 34. Constructive knowledge arises when lands are known or reasonably suspected to have been traditionally occupied by an Aboriginal community or an impact on rights may reasonably be anticipated.  While the existence of a potential claim is essential, proof that the claim will succeed is not. What is required is a credible claim.  Tenuous claims, for which a strong prima facie case is absent, may attract a mere duty of notice. As stated in Haida Nation, at para. 37:

Knowledge of a credible but unproven claim suffices to trigger a duty to consult and accommodate. The content of the duty, however, varies with the circumstances, as discussed more fully below. A dubious or peripheral claim may attract a mere duty of notice, while a stronger claim may attract more stringent duties. The law is capable of differentiating between tenuous claims, claims possessing a strong prima facie case, and established claims.

[41] The claim or right must be one which actually exists and stands to be affected by the proposed government action. This flows from the fact that the purpose of consultation is to protect unproven or established rights from irreversible harm as the settlement negotiations proceed: Newman, at p. 30, citing Haida Nation, at paras. 27 and 33.

(2)   Crown Conduct or Decision

[42] Second, for a duty to consult to arise, there must be Crown conduct or a Crown decision that engages a potential Aboriginal right.  What is required is conduct that may adversely impact on the claim or right in question.

[43] This raises the question of what government action engages the duty to consult.  It has been held that such action is not confined to government exercise of statutory powers: Huu-Ay-Aht First Nation v. British Columbia (Minister of Forests), 2005 BCSC 697, [2005] 3 C.N.L.R. 74, at paras. 94 and 104; Wii’litswx v. British Columbia (Minister of Forests), 2008 BCSC 1139, [2008] 4 C.N.L.R. 315, at paras. 11-15.  This accords with the generous, purposive approach that must be brought to the duty to consult.

[44] Further, government action is not confined to decisions or conduct which have an immediate impact on lands and resources.  A potential for adverse impact suffices. Thus, the duty to consult extends to “strategic, higher level decisions” that may have an impact on Aboriginal claims and rights (Woodward, at p. 5-41 (emphasis omitted)). Examples include the transfer of tree licences which would have permitted the cutting of old-growth forest (Haida Nation); the approval of a multi-year forest management plan for a large geographic area (Klahoose First Nation v. Sunshine Coast Forest District (District Manager), 2008 BCSC 1642, [2009] 1 C.N.L.R. 110); the establishment of a review process for a major gas pipeline (Dene Tha’ First Nation v. Canada (Minister of Environment), 2006 FC 1354, [2007] 1 C.N.L.R. 1, aff’d 2008 FCA 20, 35 C.E.L.R. (3d) 1); and the conduct of a comprehensive inquiry to determine a province’s infrastructure and capacity needs for electricity transmission (An Inquiry into British Columbia’s Electricity Transmission Infrastructure & Capacity Needs for the Next 30 Years, Re, 2009 CarswellBC 3637 (B.C.U.C.)).  We leave for another day the question of whether government conduct includes legislative action: see R. v. Lefthand,  2007 ABCA 206, 77 Alta. L.R. (4th) 203, at paras. 37-40.

(3)   Adverse Effect of the Proposed Crown Conduct on an Aboriginal Claim or Right

[45] The third element of a duty to consult is the possibility that the Crown conduct may affect the Aboriginal claim or right.  The claimant must show a causal relationship between the proposed government conduct or decision and a potential for adverse impacts on pending Aboriginal claims or rights. Past wrongs, including previous breaches of the duty to consult, do not suffice.

[46] Again, a generous, purposive approach to this element is in order, given that the doctrine’s purpose, as stated by Newman, is “to recognize that actions affecting unproven Aboriginal title or rights or treaty rights can have irreversible effects that are not in keeping with the honour of the Crown” (p. 30, citing Haida Nation, at paras. 27 and 33).  Mere speculative impacts, however, will not suffice.  As stated in R. v. Douglas, 2007 BCCA 265, 278 D.L.R. (4th) 653, at para. 44, there must an “appreciable adverse effect on the First Nations’ ability to exercise their aboriginal right”.  The adverse effect must be on the future exercise of the right itself; an adverse effect on a First Nation’s future negotiating position does not suffice.

[47] Adverse impacts extend to any effect that may prejudice a pending Aboriginal claim or right. Often the adverse effects are physical in nature. However, as discussed  in connection with what constitutes Crown conduct, high-level management decisions or structural changes to the resource’s management may also adversely affect Aboriginal claims or rights even if these decisions have no “immediate impact on lands and resources”: Woodward, at p. 5-41. This is because such structural changes to the resources management may set the stage for further decisions that will have a direct adverse impact on land and resources.  For example, a contract that transfers power over a resource from the Crown to a private party may remove or reduce the Crown’s power to ensure that the resource is developed in a way that respects Aboriginal interests in accordance with the honour of the Crown.  The Aboriginal people would thus effectively lose or find diminished their constitutional right to have their interests considered in development decisions.  This is an adverse impact: see Haida Nation, at paras. 72-73.

[48] An underlying or continuing breach, while remediable in other ways, is not an adverse impact for the purposes of determining whether a particular government decision gives rise to a duty to consult.  The duty to consult is designed to prevent damage to Aboriginal claims and rights while claim negotiations are underway: Haida Nation, at para. 33.  The duty arises when the Crown has knowledge, real or constructive, of the potential or actual existence of the Aboriginal right or title “and contemplates conduct that might adversely affect it”: Haida Nation, at para. 35 (emphasis added).  This test was confirmed by the Court in Mikisew Cree in the context of treaty rights, at paras. 33-34.

[49] The question is whether there is a claim or right that potentially may be adversely impacted by the current government conduct or decision in question.  Prior and continuing breaches, including prior failures to consult, will only trigger a duty to consult if the present decision has the potential of causing a novel adverse impact on a present claim or existing right.  This is not to say that there is no remedy for past and continuing breaches, including previous failures to consult. As noted in Haida Nation, a breach of the duty to consult may be remedied in various ways, including the awarding of damages.  To trigger a fresh duty of consultation — the matter which is here at issue — a contemplated Crown action must put current claims and rights in jeopardy.

[50] Nor does the definition of what constitutes an adverse effect extend to adverse impacts on the negotiating position of an Aboriginal group. The duty to consult, grounded in the need to protect Aboriginal rights and to preserve the future use of the resources claimed by Aboriginal peoples while balancing countervailing Crown interests, no doubt may have the ulterior effect of delaying ongoing development.  The duty may thus serve not only as a tool to settle interim resource issues but also, and incidentally, as a tool to achieve longer term compensatory goals.  Thus conceived, the duty to consult may be seen as a necessary element in the overall scheme of satisfying the Crown’s constitutional duties to Canada’s First Nations.  However, cut off from its roots in the need to preserve Aboriginal interests, its purpose would be reduced to giving one side in the negotiation process an advantage over the other.

(4)   An Alternative Theory of Consultation

[51] As we have seen, the duty to consult arises when: (1) the Crown has knowledge, actual or constructive, of potential aboriginal claims or rights; (2) the Crown proposes conduct or a decision; and (3) that conduct or decision may have an adverse impact on the Aboriginal claims or rights.  This requires demonstration of a causal connection between the proposed Crown conduct and a potential adverse impact on an Aboriginal claim or right.

[52] The respondent’s submissions are based on a broader view of the duty to consult.  It argues that even if the 2007 EPA will have no impact on the Nechako River water levels, the Nechako fisheries or the management of the contested resource, the duty to consult may be triggered because the 2007 EPA is part of a larger hydro-electric project which continues to impact its rights.  The effect of this proposition is that if the Crown proposes an action, however limited, that relates to a project that impacts Aboriginal claims or rights, a fresh duty to consult arises.  The current government action or decision, however inconsequential, becomes the hook that secures and reels in the constitutional duty to consult on the entire resource.

[53] I cannot accept this view of the duty to consult.  Haida Nation negates such a broad approach. It grounded the duty to consult in the need to preserve Aboriginal rights and claims pending resolution.  It confines the duty to consult to adverse impacts flowing from the specific Crown proposal at issue — not to larger adverse impacts of the project of which it is a part.  The subject of the consultation is the impact on the claimed rights of the current decision under consideration.

[54] The argument for a broader duty to consult invokes the logic of the fruit of the poisoned tree — an evidentiary doctrine that holds that past wrongs preclude the Crown from subsequently benefiting from them.  Thus, it is suggested that the failure to consult with the CSTC First Nations on the initial dam and water diversion project prevents any further development of that resource without consulting on the entirety of the resource and its management.  Yet, as Haida Nation pointed out, the failure to consult gives rise to a variety of remedies, including damages. An order compelling consultation is only appropriate where the proposed Crown conduct, immediate or prospective, may adversely impact on established or claimed rights.  Absent this, other remedies may be more appropriate.

B.      The Role of Tribunals in Consultation

[55] The duty on a tribunal to consider consultation and the scope of that inquiry depends on the mandate conferred by the legislation that creates the tribunal.  Tribunals are confined to the powers conferred on them by their constituent legislation: R. v. Conway, 2010 SCC 22, [2010] 1 S.C.R. 765.  It follows that the role of particular tribunals in relation to consultation depends on the duties and powers the legislature has conferred on it.

[56] The legislature may choose to delegate to a tribunal the Crown’s duty to consult. As noted in Haida Nation, it is open to governments to set up regulatory schemes to address the procedural requirements of consultation at different stages of the decision‑making process with respect to a resource.

[57] Alternatively, the legislature may choose to confine a tribunal’s power to determinations of whether adequate consultation has taken place, as a condition of its statutory decision-making process.  In this case, the tribunal is not itself engaged in the consultation. Rather, it is reviewing whether the Crown has discharged its duty to consult with a given First Nation about potential adverse impacts on their Aboriginal interest relevant to the decision at hand.

[58] Tribunals considering resource issues touching on Aboriginal interests may have neither of these duties, one of these duties, or both depending on what responsibilities the legislature has conferred on them. Both the powers of the tribunal to consider questions of law and the remedial powers granted it by the legislature are relevant considerations in determining the contours of that tribunal’s jurisdiction: Conway.  As such, they are also relevant to determining whether a particular tribunal has a duty to consult, a duty to consider consultation, or no duty at all.

[59] The decisions below and the arguments before us at times appear to merge the different duties of consultation and its review. In particular, it is suggested that every tribunal with jurisdiction to consider questions of law has a constitutional duty to consider whether adequate consultation has taken place and, if not, to itself fulfill the requirement regardless of whether its constituent statute so provides.  The reasoning seems to be that this power flows automatically from the power of the tribunal to consider legal and hence constitutional questions.  Lack of consultation amounts to a constitutional vice that vitiates the tribunal’s jurisdiction and, in the case before us, makes it inconsistent with the public interest.  In order to perform its duty, it must rectify the vice by itself engaging in the missing consultation.

[60] This argument cannot be accepted, in my view.  A tribunal has only those powers that are expressly or implicitly conferred on it by statute.  In order for a tribunal to have the power to enter into interim resource consultations with a First Nation, pending the final settlement of claims, the tribunal must be expressly or impliedly authorized to do so.  The power to engage in consultation itself, as distinct from the jurisdiction to determine whether a duty to consult exists, cannot be inferred from the mere power to consider questions of law.  Consultation itself is not a question of law; it is a distinct and often complex constitutional process and, in certain circumstances, a right involving facts, law, policy, and compromise. The tribunal seeking to engage in consultation itself must therefore possess remedial powers necessary to do what it is asked to do in connection with the consultation.  The remedial powers of a tribunal will depend on that tribunal’s enabling statute, and will require discerning the legislative intent: Conway, at para. 82.

[61] A tribunal that has the power to consider the adequacy of consultation, but does not itself have the power to enter into consultations, should provide whatever relief it considers appropriate in the circumstances, in accordance with the remedial powers expressly or impliedly conferred upon it by statute. The goal is to protect Aboriginal rights and interests and to promote the reconciliation of interests called for in Haida Nation.

[62] The fact that administrative tribunals are confined to the powers conferred on them by the legislature, and must confine their analysis and orders to the ambit of the questions before them on a particular application, admittedly raises the concern that governments may effectively avoid their duty to consult by limiting a tribunal’s statutory mandate.  The fear is that if a tribunal is denied the power to consider consultation issues, or if the power to rule on consultation is split between tribunals so as to prevent any one from effectively dealing with consultation arising from particular government actions, the government might effectively be able to avoid its duty to consult.

[63] As the B.C. Court of Appeal rightly found, the duty to consult with Aboriginal groups, triggered when government decisions have the potential to adversely affect Aboriginal interests, is a constitutional duty invoking the honour of the Crown.  It must be met.  If the tribunal structure set up by the legislature is incapable of dealing with a decision’s potential adverse impacts on Aboriginal interests, then the Aboriginal peoples affected must seek appropriate remedies in the courts:  Haida Nation, at para. 51.

[64] Before leaving the role of tribunals in relation to consultation, it may be useful to review the standard of review that courts should apply in addressing the decisions of tribunals.  The starting point is Haida Nation, at para. 61:

The existence or extent of the duty to consult or accommodate is a legal question in the sense that it defines a legal duty.  However, it is typically premised on an assessment of the facts. It follows that a degree of deference to the findings of fact of the initial adjudicator may be appropriate. . . . Absent error on legal issues, the tribunal may be in a better position to evaluate the issue than the reviewing court, and some degree of deference may be required. In such a case, the standard of review is likely to be reasonableness. To the extent that the issue is one of pure law, and can be isolated from the issues of fact, the standard is correctness. However, where the two are inextricably entwined, the standard will likely be reasonableness . . . .

[65] It is therefore clear that some deference is appropriate on matters of mixed fact and law, invoking the standard of reasonableness.  This, of course, does not displace the need to take express legislative intention into account in determining the appropriate standard of review on particular issues:  Canada (Citizenship and Immigration) v. Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339.  It follows that it is necessary in this case to consider the provisions of the Administrative Tribunals Act and the Utilities Commission Act in determining the appropriate standard of review, as will be discussed more fully below.

C.     The Commission’s Jurisdiction to Consider Consultation

[66] Having considered the law governing when a duty to consult arises and the role of tribunals in relation to the duty to consult, I return to the questions at issue on  appeal.

[67] The first question is whether consideration of the duty to consult was within the mandate of the Commission. This being an issue of jurisdiction, the standard of review at common law is correctness. The relevant statutes, discussed earlier, do not displace that standard.   I therefore agree with the Court of Appeal that the Commission did not err in concluding that it had the power to consider the issue of consultation.

[68] As discussed above, issues of consultation between the Crown and Aboriginal groups arise from s. 35  of the Constitution Act, 1982 .  They therefore have a constitutional dimension.  The question is whether the Commission possessed the power to consider such an issue. As discussed, above, tribunals are confined to the powers conferred on them by the legislature: Conway.  We must therefore ask whether the Utilities Commission Act conferred on the Commission the power to consider the issue of consultation, grounded as it is in the Constitution.

[69] It is common ground that the Utilities Commission Act empowers the Commission to decide questions of law in the course of determining whether the 2007 EPA is in the public interest.  The power 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 (Conway, at para. 81; Paul v. British Columbia (Forest Appeals Commission), 2003 SCC 55, [2003] 2 S.C.R. 585, at para. 39). “[S]pecialized tribunals with both the expertise and authority to decide questions of law are in the best position to hear and decide constitutional questions related to their statutory mandates”: Conway, at para. 6.

[70] Beyond its general power to consider questions of law, the factors the Commission is required to consider under s. 71 of the Utilities Commission Act, while focused mainly on economic issues, are broad enough to include the issue of Crown consultation with Aboriginal groups.  At the time, s. 71(2)(e) required the Commission to consider “any other factor that the commission considers relevant to the public interest”. The constitutional dimension of the duty to consult gives rise to a special public interest, surpassing the dominantly economic focus of the consultation under the Utilities Commission Act. As Donald J.A. asked, “How can a contract formed by a Crown agent in breach of a constitutional duty be in the public interest?” (para. 42).

[71] This conclusion is not altered by the Administrative Tribunals Act, which provides that a tribunal does not have jurisdiction over constitutional matters.  Section 2(4) of the Utilities Commission Act makes certain sections of the Administrative Tribunals Act applicable to the Commission.  This includes s. 44(1) which provides that “[t]he tribunal does not have jurisdiction over constitutional questions.”  However, “constitutional question” is defined narrowly in s. 1 of the Administrative Tribunals Act as “any question that requires notice to be given under section 8 of the Constitutional Question Act”.  Notice is required only for challenges to the constitutional validity or constitutional applicability of any law, or are application for a constitutional remedy.

[72] The application to the Commission by the CSTC for a rescoping order to address consultation issues does not fall within this definition. It is not a challenge to the constitutional validity or applicability of a law, nor a claim for a constitutional remedy under s. 24  of the Charter  or s. 52  of the Constitution Act, 1982 .  In broad terms, consultation under s. 35  of the Constitution Act, 1982  is a constitutional question: Paul, para. 38.  However, the provisions of the Administrative Tribunals Act and the Constitutional Question Act do not indicate a clear intention on the part of the legislature to exclude from the Commission’s jurisdiction the duty to consider whether the Crown has discharged its duty to consult with holders of relevant Aboriginal interests.  It follows that, in applying the test articulated in Paul and Conway, the Commission has the constitutional jurisdiction to consider the adequacy of Crown consultation in relation  to matters properly before it.

[73] For these reasons, I conclude that the Commission had the power to consider whether adequate consultation with concerned Aboriginal peoples had taken place.

[74] While the Utilities Commission Act conferred on the Commission the power to consider whether adequate consultation had taken place, its language did not extend to empowering the Commission to engage in consultations in order to discharge the Crown’s constitutional obligation to consult.  As discussed above, legislatures may delegate the Crown’s duty to consult to tribunals.  However, the Legislature did not do so in the case of the Commission.  Consultation itself is not a question of law, but a distinct constitutional process requiring powers to effect compromise and do whatever is necessary to achieve reconciliation of divergent Crown and Aboriginal interests.  The Commission’s power to consider questions of law and matters relevant to the public interest does not empower it to itself engage in consultation with Aboriginal groups.

[75] As the Court of Appeal rightly found, the duty to consult with Aboriginal groups, triggered when government decisions have the potential to adversely affect Aboriginal interests, is a constitutional duty invoking the honour of the Crown.  It must be met.  If the tribunal structure set up by the Legislature is incapable of dealing with a decision’s potential adverse impacts on Aboriginal interests, then the Aboriginal peoples affected must seek appropriate remedies in the courts:  Haida Nation, at para. 51.

D.     The Commission’s Reconsideration Decision

[76] The Commission correctly accepted that it had the power to consider the adequacy of consultation with Aboriginal groups.  The reason it decided it would not consider this issue was not for want of power, but because it concluded that the consultation issue could not arise, given its finding that the 2007 EPA would not adversely affect any Aboriginal interest.

[77] As reviewed earlier in these reasons, the Commission held a hearing into the issue of whether the main hearing should be rescoped to permit exploration of the consultation issue.  The evidence at this hearing was directed to the issue of whether approval of the 2007 EPA would have any adverse impact on the interests of the CSTC First Nations. The Commission considered both the impact of the 2007 EPA on river levels (physical impact) and on the management and control of the resource.  The Commission concluded that the 2007 EPA would not have any adverse physical impact on the Nechako River and its fishery. It also concluded that the 2007 EPA did not “transfer or change control of licenses or authorization”, negating adverse impacts from management or control changes.  The Commission held that an underlying infringement (i.e. failure to consult on the initial project) was not sufficient to trigger a duty to consult. It therefore dismissed the application for reconsideration and declined to rescope the hearing to include consultation issues.

[78] The determination that rescoping was not required because the 2007 EPA could not affect Aboriginal interests is a mixed question of fact and law.  As directed by Haida Nation, the standard of review applicable to this type of decision is normally reasonableness (understood in the sense that any conclusion resting on incorrect legal principles of law would not be reasonable).  However, the provisions of the relevant statutes, discussed earlier, must be considered. The Utilities Commission Act provides that the Commission’s findings of fact are “binding and conclusive”, attracting a patently unreasonable standard under the Administrative Tribunals Act.  Questions of law must be correctly decided. The question before us is a question of mixed fact and law.  It falls between the legislated standards and thus attracts the common law standard of “reasonableness” as set out in Haida Nation and Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190.

[79] A duty to consult arises, as set out above, when there is: (a) knowledge, actual or constructive, by the Crown of a potential Aboriginal claim or right, (b) contemplated Crown conduct, and (c) the potential that the contemplated conduct may  adversely affect the Aboriginal claim or right.  If, in applying the test set out in Haida Nation, it is arguable that a duty to consult could arise, the Commission would have been wrong to dismiss the rescoping order.

[80] The first element of the duty to consult — Crown knowledge of a potential Aboriginal claim or right — need not detain us.  The CSTC First Nations’ claims were well-known to the Crown; indeed, it was lodged in the Province’s formal claims resolution process.

[81] Nor need the second element — proposed Crown conduct or decision — detain us.  BC Hydro’s proposal to enter into an agreement to purchase electricity from Alcan is clearly proposed Crown conduct.  BC Hydro is a Crown corporation.  It acts in place of the Crown.  No one seriously argues that the 2007 EPA does not represent a proposed action of the Province of British Columbia.

[82] The third element — adverse impact on an Aboriginal claim or right caused by the Crown conduct — presents greater difficulty.  The Commission, referring to Haida Nation, took the view that to meet the adverse impact requirement, “more than just an underlying infringement” was required.  In other words, it must be shown that the 2007 EPA could “adversely affect” a current Aboriginal interest.  The Court of Appeal rejected, or must be taken to have rejected, the Commission’s view of the matter.

[83] In my view, the Commission was correct in concluding that an underlying infringement in and of itself would not constitute an adverse impact giving rise to a duty to consult.  As discussed above, the constitutional foundation of consultation articulated in Haida Nation is the potential for adverse impacts on Aboriginal interests of state-authorized developments. Consultation centres on how the resource is to be developed in a way that prevents irreversible harm to existing Aboriginal interests.  Both parties must meet in good faith, in a balanced manner that reflects the honour of the Crown, to discuss development with a view to accommodation of the conflicting interests.  Such a conversation is impossible where the resource has long since been altered and the present government conduct or decision does not have any further impact on the resource.  The issue then is not consultation about the further development of the resource, but negotiation about compensation for its alteration without having properly consulted in the past.  The Commission applied the correct legal test.

[84] It was argued that the Crown breached the rights of the CSTC when it allowed the Kenney Dam and electricity production powerhouse with their attendant impacts on the Nechako River to be built in the 1950s and that this breach is ongoing and shows no sign of ceasing in the foreseeable future.  But the issue before the Commission was whether a fresh duty to consult could arise with respect to the Crown decision before the Commission.  The question was whether the 2007 EPA could adversely impact the claim or rights advanced by the CSTC First Nations in the ongoing claims process. The issue of ongoing and continuing breach was not before the Commission, given its limited mandate, and is therefore not before this Court.

[85] What then is the potential impact of the 2007 EPA on the claims of the CSTC First Nations?  The Commission held there could be none.  The question is whether this conclusion was reasonable based on the evidence before the Commission on the rescoping inquiry.

[86] The Commission considered two types of potential impacts.  The first type of impact was the physical impact of the 2007 EPA on the Nechako River and thus on the fishery.  The Commission conducted a detailed review of the evidence on the impact the 2007 EPA could have on the river’s water levels and concluded it would have none.   This was because the levels of water on the river were entirely governed by the water licence and the 1987 agreement between the Province, Canada, and Alcan. The Commission rejected the argument that not approving the 2007 EPA could potentially raise water levels in the Nechako River, to the benefit of the fishery, on the basis of uncontradicted evidence that if Alcan could not sell its excess electricity to BC Hydro it would sell it elsewhere. The Commission concluded that with or without the 2007 EPA, “Alcan operates the Nechako Reservoir to optimize power generation”.  Finally, the Commission concluded that changes in the timing of water releases for power generation have no effect on water levels in the Nechako River because water releases for power generation flow into the Kemano River to the west, rather than the Nechako River to the east. 

[87] The Commission also considered whether the 2007 EPA might bring about organizational, policy, or managerial changes that might adversely affect the claims or rights of the CSTC First Nations.  As discussed above, a duty to consult may arise not only with respect to specific physical impacts, but with respect to high-level managerial or policy decisions that may potentially affect the future exploitation of a resource to the detriment of Aboriginal claimants.  It noted that a “section 71 review does not approve, transfer or change control of licenses or authorization”.  Approval of the 2007 EPA would not effect management changes, ruling out any attendant adverse impact.  This, plus the absence of physical impact, led the Commission to conclude that the 2007 EPA had no potential to adversely impact on Aboriginal interests.

[88] It is necessary, however, to delve further.  The 2007 EPA calls for the creation of a Joint Operating Committee, with representatives of Alcan and BC Hydro (s. 4.13).  The duties of the committee are to provide advice to the parties regarding the administration of the 2007 EPA and to perform other functions that may be specified or that the parties may direct (s. 4.14).  The 2007 EPA also provides that the parties will jointly develop, maintain, and update a reservoir operating model based on Alcan’s existing operating model and “using input data acceptable to both Parties, acting reasonably” (s. 4.17).

[89] The question is whether these clauses amount to an authorization of organizational changes that have the potential to adversely impact on Aboriginal interests.  Clearly the Commission did not think so.  But our task is to examine that conclusion and ask whether this view of the Commission was reasonable, bearing in mind the generous approach that should be taken to the duty to consult, grounded in the honour of the Crown.

[90] Assuming that the creation of the Joint Operating Committee and the ongoing reservoir operation plan can be viewed as organizational changes effected by the 2007 EPA, the question is whether they have the potential to adversely impact the claims or rights of the CSTC First Nations.  In cases where adverse impact giving rise to a duty to consult has been found as a consequence of organizational or power-structure changes, it has generally been on the basis that the operational decision at stake may affect the Crown’s future ability to deal honourably with Aboriginal interests. Thus, in Haida Nation, the Crown proposed to enter into a long-term timber sale contract with Weyerhaeuser. By entering into the contract, the Crown would have reduced its power to control logging of trees, some of them old growth forest, and hence its ability to exercise decision making over the forest consistent with the honour of the Crown. The resource would have been harvested without the consultation discharge that the honour of the Crown required. The Haida people would have been robbed of their constitutional entitlement. A more telling adverse impact on Aboriginal interests is difficult to conceive.

[91] By contrast, in this case, the Crown remains present on the Joint Operating Committee and as a participant in the reservoir operating model.  Charged with the duty to act in accordance with the honour of Crown, BC Hydro’s representatives would be required to take into account and consult as necessary with affected Aboriginal groups insofar as any decisions taken in the future have the potential to adversely affect them.  The CSTC First Nations’ right to Crown consultation on any decisions that would adversely affect their claims or rights would be maintained.  I add that the honour of the Crown would require BC Hydro to give the CSTC First Nations notice of any decisions under the 2007 EPA that have the potential to adversely affect their claims or rights.

[92] This ongoing right to consultation on future changes capable of adversely impacting Aboriginal rights does not undermine the validity of the Commission’s decision on the narrow issue before it: whether approval of the 2007 EPA could have an adverse impact on claims or rights of the CSTC First Nations.  The Commission correctly answered that question in the negative.  The uncontradicted evidence established that Alcan would continue to produce electricity at the same rates regardless of whether the 2007 EPA is approved or not, and that Alcan will sell its power elsewhere if BC Hydro does not buy it, as is their entitlement under Final Water Licence No. 102324 and the 1987 Agreement on waterflows.  Moreover, although the Commission did not advert to it, BC Hydro, as a participant on the Joint Operating Committee and the resevoir management team, must in the future consult with the CSTC First Nations on any decisions that may adversely impact their claims or rights.  On this evidence, it was not unreasonable for the Commission to conclude that the 2007 EPA will not adversely affect the claims and rights currently under negotiation of the CSTC First Nations.

[93] I conclude that the Commission took a correct view of the law on the duty to consult and hence on the question before it on the application for reconsideration. It correctly identified the main issue before it as whether the 2007 EPA had the potential to adversely affect the claims and rights of the CSTC First Nations.  It then examined the evidence on this question. It looked at the organizational implications of the 2007 EPA and at the physical changes it might bring about.  It concluded that these did not have the potential to adversely impact the claims or rights of the CSTC First Nations.  It has not been established that the Commission acted unreasonably in arriving at these conclusions.

E.      The Commission’s Decision That Approval of the 2007 EPA Was in the Public Interest

[94] The attack on the Commission’s decision to approve the 2007 EPA was confined to the Commission’s failure to consider the issue of adequate consultation over the affected interests of the CSTC First Nations.  The conclusion that the Commission did not err in rejecting the application to consider this matter removes this objection.  It follows that the argument that the Commission acted unreasonably in approving the 2007 EPA fails.

V.     Disposition

[95] I would allow the appeal and confirm the decision of the British Columbia Utilities Commission approving the 2007 EPA.  Each party will bear their costs.

Appeal allowed; British Columbia Utilities Commission’s approval of 2007 Energy Purchase Agreement confirmed.

Solicitors for the appellant Rio Tinto Alcan Inc.:  Bull, Housser & Tupper, Vancouver.

Solicitors for the appellant the British Columbia Hydro and Power Authority:  Lawson Lundell, Vancouver.

Solicitors for the respondent:  Ratcliff & Company, North Vancouver.

Solicitor for the intervener the Attorney General of Canada:  Attorney General of Canada, Vancouver.

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

Solicitor for the intervener the Attorney General of British Columbia:  Attorney General of British Columbia, Victoria.

Solicitor for the intervener the Attorney General of Alberta:  Attorney General of Alberta, Edmonton.

Solicitors for the intervener the British Columbia Utilities Commission:  Boughton Law Corporation, Vancouver.

Solicitors for the interveners the Mikisew Cree First Nation and the Lakes Division of the Secwepemc Nation:  Janes Freedman Kyle Law Corporation, Victoria.

Solicitors for the intervener the Moosomin First Nation:  Rath & Company, Priddis, Alberta.

Solicitor for the intervener Nunavut Tunngavik Inc.:  Richard Spaulding, Ottawa.

Solicitors for the interveners the Nlaka’pamux Nation Tribal Council, the Okanagan Nation Alliance and the Upper Nicola Indian Band:  Mandell Pinder, Vancouver.

Solicitors for the intervener the Assembly of First Nations:  Hutchins Légal inc., Montréal.

Solicitors for the intervener the Standing Buffalo Dakota First Nation:  Phillips & Co., Regina.

Solicitors for the intervener the First Nations Summit:  Pape Salter Teillet, Vancouver.

Solicitors for the interveners the Duncan’s First Nation and the Horse Lake First Nation:  Woodward & Company, Victoria.

Solicitors for the intervener the Independent Power Producers Association of British Columbia:  Blake, Cassels & Graydon, Vancouver.

Solicitors for the intervener Enbridge Pipelines Inc.:  McCarthy Tétrault, Toronto.

Solicitors for the intervener the TransCanada Keystone Pipeline GP Ltd.:  Blake, Cassels & Graydon, Calgary.