The Supreme Court of British Columbia made a declaration that the provincial Crown had a duty to consult the Ehattesaht First Nation regarding the disposition of unharvested timber in the area of a Tree Farm License. The Crown’s duty to consult had been triggered in this case, as the decision adversely affected the economic interests of the petitioners. The Crown’s decision was therefore quashed.

The Ehattesaht First Nation is part of the Nuu-chah-nulth linguistic group on the west coast of Vancouver Island. They assert Aboriginal title to an area of land that includes Tree Farm Licence 19 (TFL 19), which is presently held by the respondent Western Forest Products. The Province and the Ehattesaht First Nation had entered into a forestry agreement and interim measures agreement in 2005 that provided the Ehattesaht First Nation with harvesting opportunities within TFL 19. Those agreements had expired in 2010, and licences issued pursuant to them began to expire in 2012. A revenue-sharing agreement was concluded in March 2012, but the Ehattesaht First Nation and the Province were still negotiating timber-harvesting opportunities at the time of this proceeding.

TFL 19 had been issued to Western Forest Products in 2001 with a 25-year term. Division 3.1 of Part 4 of the Forest Act governs “cut control periods”. Pursuant to section 75.8 of the Act, where the volume of timber harvested during a cut control period is less than the sum of the allowable annual cuts available to the licensee, then the “undercut” may be disposed of to a person other than the licensee or may be returned to the Crown. For the period of 2007 to 2011, the “undercut” for TFL 19 was a total of 1,381,036 cubic metres of unharvested timber volume (the “TFL Undercut”). Western Forest Products asserted that most of the timber in the TFL Undercut was “challenged” in that it had low economic value, or would require high harvest costs due to high elevations or locations only accessible by helicopter.

During the negotiations between the Ehattesaht First Nation and the Province about timber-harvesting opportunities, the Ehattesaht First Nation asserted its desire to obtain part of the TFL Undercut. The ultimate decision of the Minister, made in April 2013, was to retain 25% of the TFL Undercut for potential disposition to third parties (such as First Nations) and return the remaining 75% to the inventory of TFL 19.

The Ehattesaht First Nation challenged the April 2013 decision on the basis that it was not properly consulted by the Crown. It was admitted by the respondent Crown that no consultation had taken place.

Although not necessary to the decision at hand, Ehrcke J. agreed with the Ehattesaht First Nation that the return of the 75% of TFL Undercut to the inventory of TFL 19 was beneficial to Western Forest Products. The calculation of the allowable annual cut was based upon the volume of the inventory. Ehrcke J. commented that “that is why Western was eager to consult with the Ministry and put its position forward before the Decision was made”. In contrast, due to the return of the 75% of the TFL Undercut to the inventory of TFL 19, it was now impossible for the Ehattesaht First Nation to be allocated anything more than 25% of the TFL Undercut. This constituted a “cap” that foreclosed the opportunity for any of the 75% of the TFL Undercut to be allocated to the petitioners.

The Court rejected the argument of the respondents that there was no reviewable decision and therefore relief under the Judicial Review Procedure Act was unavailable. Ehrcke J. followed Huu-Ay-Aht First Nation v. British Columbia, 2005 BCSC 697 and held that “concept of a ‘decision’ should not be strictly applied when there is legislative enablement for a government initiative that directly affects the constitutional rights of First Nations”.

The main issue in this proceeding was whether the duty to consult was triggered. As noted above, there was no dispute that the Ministry had not consulted with the petitioners before making the April 2013 decision. The existence of the duty to consult is reviewed on the standard of correctness.

The Court held that the three conditions required for triggering the duty to consult, as summarized in Rio Tinto, were present in this case:

  1. The Crown had knowledge of the claims of the petitioners to Aboriginal rights and title in the area of TFL 19. Indeed, the petitioners had made specific claims to timber-harvesting opportunities in TFL 19 and sought to obtain volume from the TFL Undercut.
  2. The April 2013 decision constituted “contemplated Crown conduct”. Ehrcke J. noted that the Ministry engaged in a fairly extensive consultation process with Western prior to the decision, in order to give Western the opportunity of providing input. No such opportunity was given to the petitioners.
  3. The April 2013 decision had the decision to adversely affect the petitioners’ interests in the TFL Undercut because it “capped” the portion of the TFL Undercut that might be allocated to the petitioners at 25%.

The respondent Crown argued that the petitioners could not satisfy the third criterion of the Rio Tinto test on the basis that the contemplated Crown conduct did not adversely affect an Aboriginal claim or right, but only had the potential to affect the economic interests of the petitioners. The respondents also argued that the objective of the petitioners in this proceeding was to gain an advantage in their negotiations with the Province over a new forest agreement. Ehrcke J. disagreed with such submissions: “I fail to see how the recognition of some duty to consult could be said to distort the negotiation process”.

The Court also referred to caselaw relating to the duty to consult being triggered by “strategic, higher level decisions”, such as the transfer of the TFL in the Haida case. The “adverse impact” of a Crown decision is not restricted to physical effects. Ehrcke J. referred to the decision in Da’naxda’xw/Awaetlala First Nation v. British Columbia, 2011 BCSC 620 in which the Court recognized that a duty to consult may extend to cases in which the proposed government action “may have a potential adverse impact on the First Nation’s economic interests”. Ehrcke J. held:

Thus, I do not accept the respondents’ submission that there was no duty to consult in the present case because the right or interest of Ehattesaht that was affected by the Decision was merely an economic interest as opposed to an Aboriginal right.

The Court therefore held that the duty to consult had been triggered in this case, and the Crown had a duty to consult the Ehattesaht First Nation before making the decision in April 2013 to return 75% of the TFL Undercut to the inventory of TFL 19. The April 2013 decision was quashed. The petitioners were also entitled to their costs.

http://www.courts.gov.bc.ca/jdb-txt/SC/14/08/2014BCSC0849.htm

Authors

Scott Kerwin 
SKerwin@blg.com
604.640.4029

Ramsey Glass 
RGlass@blg.com
604.632.3401

Expertise

Aboriginal Law