Dene-Tha First Nation v. British Columbia (Minister of Energy and Mines) [2013] BCSC 977

Dene Tha’ First Nation                                                                                         Petitioner

 

v.

 

The Minister of Energy and Mines and Laurel Nash in her capacity as

Executive Director of the Oil and Gas Titles Branch of the

Ministry of Energy and Mines, Nexen Inc., Penn West Petroleum Ltd.

and Vero Energy Inc.                                                                   Respondents

 

Indexed as:  Dene-Tha First Nation v. British Columbia (Minister of Energy and Mines)

Neutral citation:  2013 BCSC 977.

2012:  June 25-29; 2013:  January 25, February 19, 22.

Present:  R.M. Kyle, V.C. Mathers, Erin K. Christie, J.J. Oliphant, Wally Braul, S. Young, S. Morgan, R. Wood.

 

INTRODUCTION

[1]           In June of 2010, the Province, through the Ministry of Energy and Mines (“MEM”), disposed of 21 parcels of subsurface oil and gas tenures located in the Cordova Embayment Boundary Area (“CEB”) in the northeastern corner of British Columbia.  In essence, these tenures give their holders the exclusive right to apply to the Oil and Gas Commission (“OGC”) for the approval of exploration and extraction activities on the parcels.  The expected activities relate to potential shale gas development.

[2]           The respondents Nexen Inc., Penn West Petroleum Ltd. and Vero Energy Inc. are the current holders of those parcels.  

[3]           The 21 parcels are all located within the traditional territory of the Dene Tha’ First Nation (“DTFN”), and thus within the geographic scope of Treaty No. 8 (1899), to which DTFN is a signatory.  In this proceeding, DTFN seeks judicial review of the decision of the MEM’s Executive Director of Oil and Gas Titles, Laurel Nash, to sell the parcels.  It asks for a declaration that British Columbia had and breached a constitutional duty to consult with and accommodate DTFN in relation to potential adverse impacts from the parcel sales.  By way of further remedy, it seeks an order setting aside the parcel sales as a result of the alleged failure to consult and accommodate appropriately, or alternatively, a stay in relation to the development of the parcels until the Crown has fulfilled its constitutional obligations.

[4]           The existence of a duty to consult is neither contested nor contestable in view of DTFN’s status as a signatory to Treaty 8.  Consultation took place.  The question is whether what took place was sufficient given the extent of the Crown’s duty in the particular circumstances of this case.  

[5]           Thus, what is at issue is not policy:  whether shale gas development ought to be pursued.  That is for the legislature to decide.  What is at issue is process: whether, in disposing of the 21 tenure parcels pursuant to a policy of shale gas development, the Province fulfilled its constitutionally-mandated obligations arising from the treaty between the Crown and the DTFN.

BACKGROUND

1.            Treaty 8

[6]           Treaty 8 was signed at Fort Chipewyan in 1899.  It was described by Justice Binnie for the Court in the case of Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage), 2005 SCC 69 (CanLII), [2005] 3 S.C.R. 388:

[2]        Treaty 8 is one of the most important of the post-Confederation treaties.  Made in 1899, the First Nations who lived in the area surrendered to the Crown 840,000 square kilometres of what is now northern Alberta, northeastern British Columbia, northwestern Saskatchewan and the southern portion of the Northwest Territories.  Some idea of the size of the surrender is given by the fact that it dwarfs France (543,998 square kilometres), exceeds the size of Manitoba (650,087 square kilometres), Saskatchewan (651,900 square kilometres) and Alberta (661,185 square kilometres) and approaches the size of British Columbia (948,596 square kilometres).  In exchange for the surrender, the First Nations were promised reserves and some other benefits including, most importantly to them, the following rights of hunting, trapping and fishing:

And Her Majesty the Queen hereby agrees with the said Indians that they shall have the right to pursue their usual vocations of hunting, trapping and fishing throughout the tract surrendered as before described, subject to such regulations as may from time to time be made by the Government of the country, acting under the authority of Her Majesty, and saving and excepting such tracts as may be required or taken up from time to time for settlement, mining, lumbering, trading or other purposes.  

[24]      The post-Confederation numbered treaties were designed to open up the Canadian west and northwest to settlement and development.  Treaty 8 itself recites that “the said Indians have been notified and informed by Her Majesty’s said commission that it is Her desire to open for settlement, immigration, trade, travel, mining, lumbering and such other purposes as to Her Majesty may seem meet”.  This stated purpose is reflected in a corresponding limitation on the Treaty 8 hunting, fishing and trapping rights to exclude such “tracts as may be required or taken up from time to time for settlement, mining, lumbering, trading or other purposes”.  The “other purposes” would be at least as broad as the purposes listed in the recital, mentioned above, including “travel”.

[25]      There was thus from the outset an uneasy tension between the First Nations’ essential demand that they continue to be as free to live off the land after the treaty as before and the Crown’s expectation of increasing numbers of non-aboriginal people moving into the surrender territory.

[30]      In the case of Treaty 8, it was contemplated by all parties that “from time to time” portions of the surrendered land would be “taken out” and transferred from the inventory of lands over which the First Nations had Treaty rights to hunt, fish and trap, and placed in the inventory of lands where they did not.  Treaty 8 lands lie to the north of Canada and are largely unsuitable for agriculture.  The commissioners who negotiated Treaty 8 could therefore express confidence to the first Nations that, as previously mentioned, “the same means of earning a livelihood would continue after the treaty as existed before it”….

[31]      I agree with Rothstein J.A. that not every subsequent “taking up” by the Crown constituted an infringement of Treaty 8 that must be justified according to the test set out in [R. v. Sparrow1990 CanLII 104 (SCC), [1990] 1 S.C.R. 1075].  In Sparrow, it will be remembered, the federal government’s fisheries regulations infringed the aboriginal fishing right, and had to be strictly justified.  This is not the same situation as we have here, where the aboriginal rights have been surrendered and extinguished, and the Treaty 8 rights are expressly limited to lands not “required are taken up from time to time for settlement, mining, lumbering, trading or other purposes”.  The language of the treaty could not be clearer in foreshadowing change.  Nevertheless the Crown was and is expected to manage the change honourably.

[34]      In the case of a treaty the Crown, as a party, will always have notice of its contents.  The question in each case will therefore be to determine the degree to which conduct contemplated by the Crown would adversely affect those rights so as to trigger the duty to consult.  [Haida Nation v. British Columbia (Minister of Forests)2004 SCC 73(CanLII), [2004] 3 S.C.R. 511, and Taku River Tlingit First Nation v. British Columbia (Project Assessment Director),2004 SCC 74 (CanLII), [2004] 3 S.C.R. 550] set a low threshold.  The flexibility lies not in the trigger (“might adversely affect it”) but in the variable content of the duty once triggered.

(Emphasis added by Binnie J.)

[7]           I observe that the dispute before me, as I understand it, is not (or at least not yet) about the process by which lands within the geographical scope of Treaty 8 may be transferred from the category where the DTFN retain rights to hunt, fish and trap, to the other category, where they do not.  Rather, it is about the process which ought to govern steps proposed to be taken by the Crown in relation to the lands that have an impact upon the DTFN’s Treaty rights — steps which, in the modern context, also have an economic impact well beyond the geographic scope of the Treaty.

2.            The Oil and Gas Regulatory Regime

[8]           The MEM issues and manages petroleum and natural gas tenures under the authority of the Petroleum and Natural Gas Act, R.S.B.C. 1996, c. 361, and associated regulations.  The 21 parcels at issue here were among 108 sold on June 23, 2010, through a public disposition of Crown reserves of petroleum and natural gas conducted under section 71 of the Act.  The total raised from this disposition was $404,864,071.81, from which it is obvious that petroleum and natural gas tenure sales are a significant source of revenue for the government.  In addition, any ensuing exploration activity may result in infrastructure investment, job creation, and the payment of royalties into the provincial coffers.  In the meantime, the Province receives annual rent for the holding of subsurface tenure.

[9]           The process begins with a request from third parties that the subsurface petroleum and natural gas rights owned by the Province be made available as tenures, or parcel sales, in monthly dispositions.  Upon receiving a request for a parcel to be included for disposition, MEM conducts an internal review of the parcel to identify whether it conflicts with other land use designations.

[10]        If this internal review does not disqualify the parcel in question for tendering, then MEM refers the request for comment to various entities that might be affected, including municipal governments, other ministries and government agencies, and relevant First Nations.  This is known as the Pre-tenure Referral Process.

[11]        The decision to post a requested parcel for tender is based upon a variety of considerations and the responses and comments received from interested parties through this referral process.  On the basis of the information received, MEM may:

(a)         approve the request for disposition (with any necessary caveats or conditions);

(b)         reject the request outright;

(c)         reconfigure the parcel; or

(d)         defer the request for further review, or identify it as requiring additional work and investigation including additional consultation with First Nations.

[12]        Once the MEM has approved a parcel for sale, it is made available to third-party proponents through a competitive bid process.  The successful bidders will frequently transfer the parcels to others in subsequent transactions.

[13]        Three of the 21 tenure parcels at issue in this case consisted of Petroleum and Natural Gas Leases.  These provide their holders with the exclusive right (but not the authority) to produce petroleum and natural gas, and to apply to the OGC for activity approvals associated with production.  The remainder of the parcels comprised Drilling Licences, which provide their holders with the exclusive right (but not the authority) to explore for petroleum and natural gas by drilling wells.  It includes the right to apply to the OGC for the approval of activities associated with exploration.  A drilling licence can be converted into a lease upon application.

[14]        It is useful to reiterate that these tenures, in either form, do not authorize the conduct of any exploration or extraction activities.  Rather, while they give the holders the exclusive right to the sub-surface resources within the parcel areas, the holders must apply to the OGC for approval of any proposed oil and gas activities.  This process is governed by the Oil and Gas Activities Act, S.B.C. 2008, c. 36.

[15]        The OGC’s mandate includes the regulation of environmental protections associated with oil and gas exploration or extraction activities.  Depending on the nature and location of the proposed activity, an application to the OGC may be required to include Wildlife Management Plans, Archaeological Impact Assessments, and reports concerning consultation with First Nations.  Outcomes may include issuance of a permit, rejection of the application, issuance of a permit with conditions, or the suspension or cancellation of an existing permit.

[16]        Once a permit is issued, permit holders must comply with the Environmental Protection and Management Regulation, which requires, among other things, that oil and gas activities conserve or protect “cultural heritage resources”, which are defined as “a site or the location of a traditional societal practice that…is subject to a treaty right”.  The regulation also permits the Minister of the Environment to designate areas and species for protection in relation to oil and gas activity, requires persons carrying out oil and gas activities to ensure that the activity does not cause a “material adverse effect” on water quality or flow, and requires the restoration of sites to promote the restoration to pre-industrial states of vegetation and wildlife habitats.

[17]        It is the disposition stage that is challenged in this case.  The stage of applying for permission to carry out oil and gas activities has yet to occur.  

3.            The Consultation Regime

[18]        DTFN, the Crown, represented by the Minister of Energy, Mines and Petroleum Resources as the department was then styled (“MEMPR”) and the Commissioner of the OGC, entered into a Consultation Agreement dated October 2, 2006, which agreement, by its terms, “fulfills any and all information sharing and consultation obligations of the Parties regarding oil and gas development.”  It was in effect throughout the consultation process in this case, expiring on March 31, 2012.  Its provisions include:

1.0      PURPOSE

1.1      The purpose of this Agreement is to assist in the DTFN capacity to review and respond to oil and gas activity referrals.  The funding referred to in this agreement is only for the purposes set out in Schedule B and for no other purposes.

1.2      This Agreement will set out a process for the Province to communicate with and consult with DTFN in respect of the stages of oil and gas development outlined in Section 3.0 on Crown Lands located in the area identified as the Key Response Area as set out on the map which is Schedule A (“Key Response Area”), so as to provide DTFN with an opportunity to identify concerns or issues DTFN may have in respect of those oil and gas activities, with the intent of avoiding or mitigating any potential infringements of the treaty rights of DTFN.  The Key Response Area, for this Agreement only, is indicated on the map attached as Schedule A of this Agreement.

3.0      ROLES AND RESPONSIBILITIES – CONSULTATION AND INFORMATION SHARING

CONSULTATION

Pre-Tenure Stage

3.1      MEMPR will meet with DTFN to explain and examine appropriate methods of information sharing and consultation in the Pre-tenure Referral Process.

3.2      MEMPR will provide to DTFN referral maps for posting requests and DTFN will review and provide comments in accordance with the MEMPR Pre-tenure Referral Process.

Oil and Gas Activity Applications

3.6      The Parties will encourage oil and gas companies to submit applications to the Commission well in advance of their construction schedule.

3.7      The Commission will forward to DTFN oil and gas activity applications, and relevant documents received from the proponent, on Crown Land and contained within the Key Response Area (Schedule A).

3.8      DTFN will review the applications and provide the Commission with a written response within 10 working days of receipt of the application, or by a later date as agreed by the Parties in accordance with section 3.9.  The written response will outline DTFN’s interests regarding the applications and any concerns in respect of, and include any options for the avoidance or mitigation or minimize nation of, potential infringement of treaty rights or other First Nation related interests

3.9      DTFN may request an extension on a case-by-case basis to the original 10 working days.  For providing the written response to the Commission and the Commission will not unreasonably withhold its consent to a reasonable extension request.

3.10     The Commission will give due consideration to DTFN’s response, comments and options.

3.11     DTFN and the Commission will endeavor to resolve any outstanding concerns of DTFN, as identified in DTFN’s written response, in a timely manner.  The applicant may be involved at this stage to assist in resolving any outstanding concerns. 

3.12     If the Commission does not receive DTFN’s written response as outlined in section 3.8, the Commission, after advising DTFN, will proceed with its decision making on the basis of available information and any input from other First Nations.  

3.13     If DTFN and the Commission and, where appropriate, the proponent are unable to resolve DTFN’s concerns, the Commission agrees:

3.13.1  to provide DTFN with a summary of the relevant information it will rely upon and how DTFN concerns are being/have been addressed in making a decision;  

3.13.2  to provide DTFN with time to review and provide further input;

3.13.3  to indicate when a decision will be made; and

3.13.4  that, before the date of decision indicated under section 3.13.3, the DTFN may request a meeting between the Chief and the Commissioner, or their designates, to attempt to resolve any outstanding concerns.  This shall occur within 5 working days of the decision date indicated in 3.13.3.  If the Chief and the Commissioner, or their designates, are unable to meet or confer, the Commission will proceed with its decision-making.

3.14     If additional concerns are put forward in writing by the DTFN under section 3.13.2 and are not resolved under section 3.13.4, the Commission, upon request of the DTFN, will provide a written summary of how it took into consideration those accidental concerns.

3.15     The Commission upon request, will provide DTFN with a copy conditions placed upon any approval, based on DTFN’s input and subject to Commission procedures.

[19]        The “Key Response Area” referred to in section 1.2 covered a geographic area agreed among the parties (MEM, OGC and DTFN) as covering the locations where consultation would be required in relation to oil and gas activity referrals, and were meant to reflect the area in which DTFN practised its traditional activities.  It included the area of the parcels in question.  In January of 2009, DTFN requested an expansion to the Key Response Area.  OGC and MEM agreed to negotiate such an expansion, and in the meantime MEM agreed to notify DTFN of any proposed partial dispositions located within the requested area of expansion.

[20]        The agreement obliged the Province to provide the DTFN with capacity funding in the approximate amount of $450,000 annually, for its assistance in reviewing and responding to oil and gas referrals at both the pre-tenure and activity applications stages.

[21]        It will be observed that, by the terms of the agreement, most of the prescribed consultation process takes place at the stage of the Oil and Gas Activity Applications.

4.            The Consultation Process

[22]        A Consultation Chronology prepared by counsel in chart form is 39 pages long.  For present purposes, I propose to concentrate on the process that took place between the Crown and DTFN in relation to the disposition of parcels including the ones in question.  This process began in May of 2008 and culminated in the sale of the parcels in question on June 23, 2010.  What follows is by no means an exhaustive description of that process, but is rather a summary of what I consider to be the more important aspects of it.

[23]        It is relevant to note that the 21 parcels at issue did not derive from a single referral to the DTFN.  Rather, they comprised parcels from three different referrals.  The first was in May of 2008 in relation to a proposed disposition in August of that year.  The second was in October of 2008 in relation to a proposed disposition in February of 2009.  The third was in January of 2009 in relation to a proposed disposition in April of 2009.  Through the consultation process, all parcels proposed for disposition were deferred until June of 2010.  As part of the June 2010 tenure referral process, the 21 parcels at issue were sold, but MEM deferred 31 other parcels due to concerns raised by DTFN, particularly with respect to the potential impact on caribou.  These 31 all remain in a state of deferral.  That status will not change without further consultation.

[24]        A fourth group of parcels proposed for disposition on May 20, 2009, were not listed for sale, but were deferred at the request of the DTFN.

(a)         Correspondence and meetings: May 2008 – November 2009

[25]        In addition to engaging with DTFN in the initial referral process in May of 2008, MEM referred the proposed dispositions to a number of other potentially affected aboriginal communities and requested comments from various government agencies (such as the Ministry of Environment, or MOE) and local governments.

[26]        DTFN’s initial response was to request more time to review the parcels “for its land-use planning in a new area”, and MEM accordingly deferred those parcels.  There followed an extensive exchange of correspondence as both parties sought further information from the other, and attempted to schedule a meeting.  Counsel for the DTFN advised that her client needed “full and complete information about potential uses for the lands at issue as the sales proceed”.  

[27]        In response, MEM’s representative, Mr. Paterson of the Oil and Gas Titles Branch, noted that he was unable to provide specific information about potential development of the particular parcels, but sought to provide examples of the type of activities that might occur:

If the petroleum and natural gas rights for parcels 0808152 to 0808174 proceed to sale and are successfully acquired, it is anticipated the companies making the acquisitions will apply for authorizations to carry out additional surface activity particularly relating to the initial water/sand fracture treatments to bring wells into production.

It is anticipated that central pads, designed to reduce land disturbance by concentrating several wellheads together on one pad, will be employed.  This expected “shale gas” concept involves drilling many horizontal wells, spaced about 200 metres apart.  The central pads could concentrate up to 24 wellheads in one location, to reduce surface use.

The total land disturbance per pad, including access roads and surface pads containing the wells, is calculated by a major operator at 27 hectares per pad.  One twenty wellhead pad with six completed intervals in each horizontal well would replace the need for 160 vertical wells, drastically reducing surface use.

We expect approximately one pad per 3 or 4 sections.  Three sections is about 750 hectares and four sections is just over 1000 hectares, so 27 hectares of roads and well pad use per 750-1000 hectares is expected to be used.

After each well is drilled it is treated over about 6 intervals with about 4000 cubic metres of water and 100 tonnes of sand per interval.  Therefore, the amount of water, sand and completion tracking units used is very large at the beginning of production.  Production is then anticipated to decline for 2 or 3 years and then stabilize for several decades allowing for a longer than conventional production cycle.

[28]        Mr. Paterson provided an enhanced map of the area.  He also requested “detailed information…about the [DTFN’s] rights and uses in the area of the parcels” to assist in understanding the potential impacts from the proposed sale.  A meeting suggested for October of 2008 was postponed at DTFN’s request in order to permit their legal counsel to attend, and MEM agreed not to sell or post for sale any of the parcels in the meantime.

[29]        As part of the ongoing exchange of information, counsel for DTFN requested that the Ministry provide a “strength of claim” analysis (see Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73 (CanLII), [2004] 3 S.C.R. 511).  Counsel for MEM, Ms. Annie Thuan, declined to do so, in my view properly, on the ground that the DTFN had no “claim” to be assessed, but rather was the beneficiary of established treaty rights of which the Province was well aware.  Ms. Thuan also declined to advise DTFN of the Ministry’s assessment of the depth of consultation required on the ground that such information was based upon legal advice and was privileged – a somewhat startling position that was subsequently modified.

[30]        In early October of 2008, a further referral package was provided to DTFN concerning additional proposed tenures to be considered for disposition in the February 25, 2009 sale.  As with the May 2008 package, it was referred also to other First Nations and government agencies.

[31]        A meeting was finally scheduled to take place in Bushe River, Alberta, on November 19, 2008, and MEM confirmed that no parcel dispositions would take place prior to the proposed meeting.  I pause to observe that DTFN reserves are all located in Alberta.  There is none in British Columbia.  Approximately 1,800 of the band’s 2,400 members reside on-reserve.

[32]        DTFN supplied an extensive Traditional Land-Use Report in early November of 2008.

[33]        By letter dated November 14, 2008, to counsel for DTFN, Ms. Thuan reiterated that it was not possible at that time to specify the activities and land uses that would take place on the parcels until they were sold, and applications were submitted to the OGC for activity approval.  She referred to the anticipated uses described by Mr. Paterson.  The letter also discussed the Fort Nelson Land and Resource Management Plan which referenced a traditional use study completed by the DTFN in 1997.

[34]        By letter dated November 17, 2008, Chief Ahnassay of the DTFN wrote to the Minister in relation to the proposed parcel dispositions, setting out the concerns that remain the basis for the DTFN’s position in this proceeding.  That letter included the following passages:

We see pre-tenure consultation as an important strategic stage at which there is a realistic opportunity to accommodate our concerns about the impacts of development and to carry out planning related thereto, before companies acquire rights and expectations that the parcels will be developed.

In my view, DTFN has a unique perspective with respect to oil and gas development.  I say this because our people have lived with the impacts of oil and gas development within our Traditional Territory for fifty years.  Our Traditional Territory is already covered by significant numbers of oil and gas producing wells, oil sands projects, many kilometres of seismic lines and pipelines, forestry and many kilometres of roads associated with such activity.  We continue to be inundated with new applications for forestry, oil and gas and other industrial activities every year.

Such activities have made it increasingly difficult for our members to exercise our Treaty and Aboriginal rights to hunt, fish, trap, gather and carry out our traditional pursuits within parts of our Traditional Territory and we are concerned about the potential for the parcel sales and resulting development thereon to further contribute to these difficulties.

As we have stated on many occasions to your Government, we are extremely concerned about the impacts of oil and gas and other development on the quality and quantity of water on which we rely to exercise our rights and which support the ecosystem.  You need to understand that we do not hunt, fish, trap and gather merely for sport, recreation or amusement; it is the essence of who we are, how we live, and how we learn and pass down our culture.  The more that access to our land is cutoff and blocked and the more that important spiritual and ceremonial sites are destroyed, the more a part of our culture dies.

… What is missing from the regulatory review process is accurate and adequate information to answer this basic question: is there enough land left within our Traditional Territory where we can exercise our rights now and in the future in a meaningful way – so that we are not required, yet again, to go “elsewhere” to do so.

[Emphasis added.]

[35]        The first meeting took place as scheduled on November 19, 2008, between MEM and DTFN representatives, including legal counsel for both parties.  At the outset, DTFN insisted, rather unhelpfully, that the meeting did not amount to consultation, but was an “exploratory” meeting for the purpose of preliminary information gathering.  MEM counsel acknowledged that the meeting did not constitute the consultation process, but took the position that it was part of it.  Among the issues reviewed were the tenure referral process, the OGC application process, the location of prior sales within DTFN territory, timelines provided under the Consultation Agreement, the process for shale gas production, and the availability of funding under the Consultation Agreement.  There were also references by DTFN members to the prospect of remuneration in exchange for oil and gas activities occurring on their respective trap lines.  DTFN made a number of requests for further information.

[36]        The second meeting took place on January 22, 2009.  In the meantime, counsel for MEM had responded to a number of requests for information dealing with matters such as environmental impact assessments, wildlife mitigation plans, archaeological impact assessments, and prior parcel dispositions.  MEM counsel also confirmed that an OGC representative would attend the meeting to discuss the OGC consultation process, and offered to arrange for a representative from Devon Canada to attend to provide an overview on the shale gas process.  With respect to the duty to consult, Ms. Thuan said this:

I understood your request in your letter to me of October 21, 2008 as relating to the Province’s legal position generally on the duty to consult that applies to proposed land sales in the treaty context.  As I have explained in my earlier e-mail, this is not the type of information we can provide.  The Ministry will however share its preliminary assessment of the potential impacts the proposed disposition may have on DTFN’s treaty rights and the appropriate level of consultation that applies in the circumstances.  At that point, the DTFN will have the opportunity to provide comment on the Ministry’s preliminary assessment.

The Ministry is not in a position to prepare the preliminary assessment without having first engaged in a dialogue with the DTFN about the potential impacts the proposed disposition may have on their treaty rights.  As you would recall, we did not get to this agenda item at the November 2008 meeting.

[37]        The January meeting included discussion on DTFN’s Traditional Use Study methodology, discussion on the history of DTFN trapping, a description of the shale gas exploration process including water use, ongoing research taking place in the Horn River Basin concerning water recycling and sustainability, studies considering the use of non-potable groundwater, and regulation of water use by the OGC (short-term) and the Ministry of Environment (long-term).

[38]        Following this meeting, counsel for the DTFN, Ms. Kyle, wrote a number of letters to set out her client’s position on various issues, and requesting further information.

[39]        By letter dated April 9, 2009, Ms. Nash, (as noted, the ultimate decision-maker in this case) wrote to Ms. Kyle.  Ms. Nash referred Ms. Kyle, again, to the Integrated Land Management Bureau concerning questions on the Fort Nelson Land and Resource Management Plan, confirmed that a Ministry impact assessment was under preparation, and discussed the impact of shale gas development:

Shale gas development represents new opportunities and technological challenges to both industry and government.  Geoscience BC is administering a series of research programs to ensure the orderly and environmentally sustainable development of this resource in British Columbia.  One such project in the Horn River Basin is seeking to develop innovative solutions, including the identification of potential water sources for gas production and appropriate sites for spent water disposal.  The knowledge acquired through this study can be applied in the Cordova Basin and may significantly reduce the surface environmental footprint of development and help to protect surface fresh water aquifers.  Geoscience BC is committing up to five million dollars to this program; funding that will be matched with contributions from industry, academia and other project partners.

Shale gas development will be planned and implemented in a way that duly considers a variety of values, including First Nation interests and environmental impacts.  The BC Oil and Gas Commission’s (OGC) determination that the proposed parcels are not in any wildlife habitat areas or areas of concern for wildlife is supported by studies and mapping performed by the Ministry of Environment (MOE).

In your letter, you also raised concerns regarding the impact of development activities on species such as Boreal Caribou.  As the Boreal Caribou is federally listed as threatened under the Species at Risk Actthe Province is currently engaging in recovery planning.  This planning extends to the due consideration of caribou populations in the development of shale gas policy.  The employee is also presently considering Caribou management planning for the Northern Caribou.  As you may be aware, the Province has already undertaken Recovery Implementation and Planning for the Mountain Caribou that extend from the Hart Ranges south to the U.S. border.

I also understand that an Environmental Protection and Management Regulation is being drafted under the Oil & Gas Activities Act (OGAA).  This new regulation specifically addresses sensitive habitat areas, such as Winter Range Habitat and Ungulate Winter Range, and will establish the new regulatory requirements applicable to all oil and gas activities in these areas.  The MOE has participated directly in the development of this regulation and the specific regulatory requirements that will become applicable when the OGAA is brought into effect by government.

[40]        On the issue of accommodation, Ms. Nash wrote:

As previously mentioned in this letter, Ministry staff is currently assessing the impact of the proposed sale on the DTFN’s treaty rights and any appropriate accommodation measures (including the inclusion of caveat provisions on parcels put forward for sale).  The Ministry has already deferred several parcels in response to concerns put forward by the DTFN.  Any discussion of other measures, such as an Economic Benefit Agreement, are outside of this Ministry’s mandate and should be directed to the Ministry of Aboriginal Relations and Reconciliation.

Ms. Nash then went on to review the funding available to assist the DTFN in reviewing oil and gas related activity referrals, pursuant to the Consultation Agreement.

[41]        On April 27, 2009, the MEM delivered its own Traditional Use Report to DTFN.  This report was prepared by the Aboriginal Research Group of the Ministry of Attorney General.  The MEM asked for DTFN’s comments, and requested further site specific information on particular parcels.  It was confirmed that there would be no development permitted within the specific protected areas of the Thinahtea North and South Protected Boundaries. 

[42]        In separate correspondence, Mr. Thrift of MEM provided information including total land disturbance anticipated under an approved application, and a study relating to impacts of oil and gas activities on furbearing species.  Mr. Thrift further advised that while the degree of impact from the proposed disposition was difficult to determine without specific land-use information from DTFN, MEM was proceeding with such an assessment and was reviewing a variety of materials including the Mackenzie Valley Pipeline Traditional Use Study, the DTFN Traditional Land Use Report, the DTFN’s 1997 Traditional Use Study and the MEM’s own Traditional Use Report.

[43]        There was a great deal of correspondence back and forth both demanding and providing information, not always to the parties’ satisfaction.  Although Ms. Kyle suggested in correspondence that MEM had merely been going through the motions of consultation without attempting to address her client’s concerns meaningfully, I do not find that to have been the case.  As I read the materials, those representing the MEM were working hard to provide the appropriate information and to take into account and respond to the DTFN’s legitimate concerns.  The perceived difficulty in engagement appears to me to be due at least in part to the fact that, as Ms. Nash had indicated, both sides were dealing with new opportunities and new challenges. 

[44]        By letter dated August 12, 2009, Chief Ahnassay wrote jointly to the Minister of Aboriginal Relations and Reconciliation and the Minister of Energy and Mines, attaching four binders of materials relating to shale gas exploration in general.  These materials included research articles, press releases and Internet postings, largely relating to the adverse environmental impact of shale gas development.  Among the points raised by Chief Ahnassay:

[After describing the Dene Tha’ traditional lifestyle:] As indicated later in this letter, we are not “anti-development” per se.  However, it must be recognized that, for us, our preference is that we can continue to live on the land and sustain ourselves and our culture from the land.  At the same time, we are not naïve and realize that more of our Traditional Territory will become developed, whether we like it or not.  The key is to find a reasonable compromise or accommodation: to carry out planning to protect some of our lands and to ensure that we benefit from development that does arise.

The location of the Parcel Sales, the potential deposits of shale gas and other unconventional forms of gas, the exploratory drilling, and related infrastructure all indicate that the Parcel Sales are primarily related to the eventual development of shale gas and other unconventional gas.  In short, potential development of these lands is not merely theoretical.  The lands are being purchased, with vast sums of money being spent, for a purpose: to develop the resources on those lands.  We ask you to review the materials in the binders in order to inform your consultation with Dene Tha’ in respect of the Parcel Sales.

We are often told by the Crown that the time to consult is not at the Land Sale stage, but rather when the Crown receives project applications.  We disagree with a project-by-project approach for a number of reasons.  First, once the lands are sold, there is an inevitable momentum for development.  All rights take a backseat to development.  Second, project-by-project consultation, including Terms of Reference for environmental assessments, taken narrow approach in terms of scoping, including scoping of potential indirect and cumulative impacts.  Third, there is often little or no focus on our rights and what is needed to sustain those rights.  Our experience with project-by-project “consultation” is that it leads to the “death by a thousand cuts” of our rights.  This is evident from the uncontrolled development of other parts of our Traditional Territory.

…What is missing from the decision-making and regulatory review process for the Parcel Sales is accurate and adequate information to answer this basic question: is there enough land left within the vicinity of the Parcel Sales (assuming development of shale gas and other resources) on which our First Nation can meaningfully exercise our rights now and into the future – so that we are not required, yet again, to go “elsewhere” and so that we are not ultimately left with no more “elsewheres” to go.

[Double emphasis original.]

[45]        Chief Ahnassay proposed a three-pronged approach moving-forward: entering into a land-use planning process with DTFN to identify lands which ought to be protected from further development; for those areas which are not to be protected, entering into discussions of how DTFN can benefit economically from their development; and discussing an Economic Benefits Agreement/revenue-sharing agreement in relation to such development.

[46]        On August 27, 2009, Mr. Paterson provided Ms. Kyle with a draft summary of DTFN uses in the area of the deferred petroleum and natural gas parcels.  This was in the form of a chart indicating whether the parcels included sacred/ceremonial sites or gathering areas, and whether they were the sites of both historical and current use for fishing, hunting and trapping.  Mr. Patterson requested further site-specific information.

[47]        Ms. Kyle responded with a letter dated October 12, 2009, attaching a series of maps showing DTFN berry & medicinal plant gathering areas, trapping areas, sacred sites, fishing areas, camps & settlements, trails and migration routes, traditional ecological knowledge areas, and hunting areas.  These were all superimposed over the Key Response Area and, within that, the area of the proposed parcel sale postings.  There was no delineation of matters such as relative importance or frequency of use.  Similarly, interviews of DTFN members provided to MEM described traditional activities, many of which took place in Alberta, but without detailed site-specific information relating to the area of the proposed parcel dispositions.

[48]        I observe parenthetically that while this information illustrated some geographical intersections between the parcels in question and areas of DTFN traditional use, it did not, I find, establish a probability of interference with DTFN’s meaningful rights to hunt, fish, trap and gather.

(b)         The DTFN’s Rate of Disturbance Report

[49]        Further exchanges of correspondence took place before, on November 24, 2009, Ms. Kyle delivered to MEM a Rate of Disturbance Report prepared by MSES Inc. (Management and Solutions in Environmental Science) of Calgary.  This report discussed the increasing “rate of disturbance” to DTFN territory in the vicinity of the proposed parcel dispositions, the projected decrease of natural surface in that area, the effect of disturbance on moose habitat use, and the lack of a proper analysis of how much land is sufficient for the exercise of a First Nation’s traditional rights.

[50]        By way of introduction, the report noted:

MSES Inc. (MSES) was retained to measure the changes in land cover within certain portions of the Traditional Land Use (TLU) area of DTFN.  In this study, the focus area is located in B.C. south of 60°N (Figure 1).  The total area that was analyzed is 31,908 km².  For the purpose of this study we focus on the disturbance of traditional lands which we understand to mean the loss of natural land cover resulting from development or human activities.  

[51]        This focus area thus comprised the area of DTFN traditional land use within British Columbia, of which the area of the proposed parcel sales formed a relatively small part in the northeast corner.  It did not focus on areas of DTFN traditional land use in Alberta or the Northwest Territories.

[52]        MSES went on to describe its methodology, and its conclusions concerning the rate of disturbance:

2.1      Past and Current Disturbances

The rate of disturbance through industrial activities was calculated based on satellite imagery.  Using a series of satellite Landsat5 images we calculated the yearly rate of converting natural surfaces to industrial ones from 1993 to present…

In our ecological research and evaluations we typically find that animals avoid the disturbance by humans near industrial activities.  This area in the vicinity of industrial features is typically called a “zone of influence” (ZOI).  Moreover, in our experiences working with First Nations, we have learned that local hunters and trappers also avoid the areas near industrial activities.  Consequently, in addition to analyzing the effects of direct vegetation clearing and the simple length of linear corridors, we have applied a ZOI around each footprint and each linear industrial feature.

A 250 m ZOI around the footprints of developments and the centerlines of linear corridors was applied based on the potential for reduced animal activity and hunting and trapping activity near industrial features.  The distance of 250 m was chosen because, for example, moose sign (such as tracks or faecal pellets) was found to be reduced within 200 m of roads (Rolley and Keith 1980), Woodland Caribou avoid industrial features within about 250 m (but avoidance could be greater or smaller for some features during some seasons, Dyer et al. 2001), and other mammals have been observed to avoid industrial features within this distance (Forman et al. 2003)….

Clearly the ZOI differs widely with parameters such as wildlife species, the type of industrial features and related activities, and the ecological context (reproductive cycle, hunting or predation regimes, habitat structure and quality).  However, it appears that in the absence of detailed information on any of these parameters the 250 m distance is a reasonable approximation for a zone within which First Nations could not effectively exercise their Treaty Rights.

Assuming that the sensory disturbance includes a ZOI of 250 m near any industrial feature, of the 31,908 km² land area in the BC portion of this study, 19% was disturbed in 1993, 27% in 2002, and 31% in 2008 (Figure 2).

[53]        Assuming that the yearly rate of disturbance would remain constant in the future at 260 km² per year, the calculated average over the past 15 years, the authors concluded that the projected disturbance of all natural land cover would be 100% by 2095.

[54]        The report concludes as follows:

4.0      Recommendations and Closure

Information is now needed on how much land is “sufficient land” to exercise traditional rights.  In other words, an analysis is essential to show how much land a First Nation requires to exercise its rights.  Is the remaining 69% in the year 2008 sufficient for this purpose?  If yes, how much more development can occur until the threshold is reached when First Nations can no longer exercise their rights in the BC focus area?  Whether it is at the current state or at some future development scenario, the observed rate of development begs the question: will the First Nations and their culture disappear from the landscape or will regional development planning somehow accommodate the existence of First Nations?  Our results provide a basis for discussion between the DTFN and industry and government, with the hope that such discussion will lead to avenues by which the DTFN can be involved in regional land-use planning, setting targets and thresholds that would achieve a balance between industrial development and effective traditional land-use.

(c)         Further Correspondence and Information Exchange:  December 2009 – March 2010

[55]        In a letter dated December 18, 2009, the Minister of Energy and Mines wrote to Chief Ahnassay to respond to the Chief’s letter of August 12.  The Minister apologized for the delay.  He then referred to the Consultation Agreement between the parties, and confirmed the Ministry’s commitment to fulfilling its obligations under that agreement.

[56]        Turning to the Chief’s suggestion that the Crown had often indicated that the time to consult was not at the land sales stage, but rather at the project application stage, the Minister assured the chief that he did not share that position:

The Ministry has demonstrated this by engaging the DTFN in meaningful consultation and, to support those consultations, has deferred all parcels within the Cordova Embayment Boundary since May 2008.  Further, the Ministry has provided the DTFN with considerable information, both in face-to-face meetings and through correspondence, in support of consultation on those parcels.  It is my understanding that in the coming weeks, the Ministry will be sharing with you our “Preliminary Potential Impact Assessment for Petroleum and Natural Gas Parcels within the Cordova Embayment Boundary” (Assessment) for your review and comments prior to the Ministry making decisions on which parcels could proceed to disposition.

[57]        Responses to matters raised by Ms. Kyle were set out in a letter dated January 8, 2010, from Ms. Mah-Paulson, Director of Resource Development, Oil and Gas Titles Branch.  Among other things, Ms. Mah-Paulson noted that Caribou management is a priority for the Province, and that MEM and MOE were in discussions on management strategies that would be applicable to oil and gas activities.  She further noted that the Ministry had been deferring parcels which overlaps significantly with Boreal Caribou type A ungulate winter range and wildlife habitat areas.

[58]        Concerning groundwater contamination and health issues, Ms. Mah-Paulson observed that the OGC protects potable groundwater under the Drilling and Production Regulation, and included a link to the OGC fact sheet concerning fracturing and disposal of fluids.

[59]        Turning to the MSES rate of disturbance report, Ms. Mah-Paulson advised that MEM was comprehensively reviewing it, but could not support the report’s methodology relating to its footprint analysis.  She advised that the Ministry would shortly be sharing its “Preliminary Potential Impact Assessment for the Cordova Embayment Boundary”.

[60]        With respect to the Boreal Caribou issue addressed by Ms. Mah-Paulson, the MEM and MOE established a body called the Petroleum and Natural Gas Caribou Tactical Team in December of 2009 for the purpose of implementing interim measures to maintain conservation options for Boreal Caribou pending decisions concerning the nature and extent of permanent habitat protection.  The team subsequently made recommendations to Ms. Nash, the statutory decision-maker, that included maintaining the deferral of 29 parcels pending further reviews by the team.  This did not occur as an outcome of consultation with the DTFN, but rather pursuant to a broader government initiative to protect Caribou habitat that involved a congruency of wider public interests with those of the DTFN.

[61]        By letter dated March 22, 2010, Ms. Mah-Paulson finally delivered the MEM’s Draft Preliminary Potential Impact Assessment report (the “Preliminary Assessment”) to legal counsel for the DTFN, and provided further information in answer to questions raised by Chief Ahnassay in his August letter two of which answers were these:  

Question 1:  What steps will your government take to analyze the potential direct, indirect and cumulative social, economic, cultural and environmental impacts of the Parcel Sales and reasonably foreseeable development arising therefrom, as well as, the potential impacts on our section 35 rights?

Response:  As identified above, the Ministry has prepared the draft Preliminary Assessment.  In the draft Preliminary Assessment, the Ministry identifies its view as to the potential direct impact on DTFN treaty rights from PNG tenure dispositions and associated potential oil and gas activities in support of development of the CEB.

The Ministry is also of the opinion that strategies are in place to avoid and/or mitigate any potential impacts on First Nation treaty rights to the use of tenure caveats as well as through the Oil and Gas Commission’s operational considerations and application-specific consultations.

Question 4:  Are you prepared to work with us to identify and properly assess the cumulative impact of all existing, planned and reasonably foreseeable development in the vicinity of the Parcel Sales, specifically as that development affects our ability to meaningfully exercise our section 35 rights?  If not, why not?

Response:  The Ministry has had discussions with other government departments through the pre-tenure in referral process, which has identified that oil and gas is the primary industrial activity taking place in the CEB.  The draft Preliminary Assessment captures the primary footprint within the area of these deferred parcels, considers potential impacts in support of development of the CEB shale formation and takes into account, among other considerations, the context of other limited industrial activity in the DTFN Key Response Area (KRA).  The Ministry, and at the activity stage the Oil and Gas Commission, have sufficient legislative and regulatory tools to manage oil and gas development in an environmentally responsible manner; therefore the Ministry is of the opinion that there is no need for a cumulative impacts study.

(d)         The MEM’s Draft Preliminary Potential Impact Assessment

[62]        Ms. Mah-Paulson described the purpose of the Preliminary Assessment as two-fold:

1.         To summarize, to this point in the consultation process, the Ministry’s views as to any potential impacts on DTFN treaty rights from petroleum and natural gas (PNG) tenure dispositions in the CDB; and

2.         To further inform this consultation process based on the DTFN response to the draft Preliminary Assessment.

[63]        The assessment itself set out the following:

PURPOSE

The purpose of this report is to set out a preliminary assessment of the potential impacts on Dene Tha’ First Nation treaty rights as a result of petroleum and natural gas (PNG) tenure dispositions and associated potential oil and gas activities resulting from development of the Cordova Embayment shale formation.

[64]        The document continued with a review of the background, and an overview of the pre-tenure referral process:

The purpose of this referral process is to provide the DTFN with an opportunity to identify comments, concerns or issues they may have in respect of those proposed PNG parcels and on its provision to MEMPR to enable that information to be appropriately taken into consideration into determining:

•         if the proposed parcel(s) can be made available for disposition or not; and

•         if the proposed PNG parcel(s) are made available, but considerations may need to be given to avoid or mitigate any potential adverse impact on the treaty rights of the DTFN.

PNG parcels which proceed to disposition are issued with the following rights:

•         exclusive rights to the subsurface formation being acquired through the dispositions; and

•         the authority to make applications to the OGC for on-the-ground activities.

Through the PNG disposition process, no authority to conduct any activities on the lands is provided.  As per the [Consultation Agreement], consultation will occur between the OGC, the DTFN and where appropriate, the proponent, on all applications for service activities that may result from issuing the tenure (i.e., well authorization, etc.).

[65]        Turning to the current level of activity within the Cordova Embayment Boundary and the Key Response Area, the Preliminary Assessment noted that existing oil and gas activity had been targeting the Jean Marie geological formation and that existing activity in support of that development had utilized horizontal wells with wellheads spaced more than two kilometres apart for gas production.  The Ministry estimated the current petroleum and natural gas surface footprint within the CEB to be less than 1.0% of the total surface land area.  Applying the same analysis to the entire DTFN Key Response Area, including all registered trap lines, the Ministry concluded that the existing petroleum and natural gas footprint was less than 1.1%.  

[66]        The report then turned to potential activity:

MEMPR, based on review of the formations requested in the proposed parcels, anticipates that the proposed parcels, if made available, would be developed using a shale gas technique, which would include central pads designed to reduce land disturbance is by concentrating several wellheads together on one pad….

Based on discussions with producers currently developing Plans for Activities within the Horn River Basin, another shale gas area within British Columbia, MEMPR anticipates the total land disturbance per pad, including access roads, types and surface pads containing the wells, to be approximately 27 hectares.  One twenty wellhead pad with 6 completed intervals in each horizontal well would replace the need for 160 vertical wells, significantly reducing the surface footprint.

The same analysis was then put forward as was outlined by Mr. Patterson in 2008: assuming one pad per 750-1000 hectares, the potential shale gas activity within the CEB was conservatively estimated to result in a surface footprint covering 2.7% to 3.6% of the total area.  It was thought that that percentage may be reduced in practice if steps were taken, for instance, to coordinate development plans among neighboring tenure holders or to coordinate or utilize existing infrastructure rather than building new.

[67]        After reviewing the overlap of registered trap lines with the proposed parcels, the Preliminary Assessment then reviewed the consultation process and the concerns raised by the DTFN including direct effects on their treaty rights, and cumulative effects.  With respect to direct effects, the report concluded that the impact would be low because of the very small size of the estimated PNG footprint.  On the subject of cumulative effects, the Ministry said this:

MEMPR does not share the view that a cumulative effects study is required before government makes a decision on whether or not to proceed with PNG tenure dispositions within the CEB.  MEMPR, through this assessment, has identified that the existing oil and gas footprint is estimated to be less than 1.0% within the CEB and less than 1.1% within the KRA and based on discussions with the Integrated Land Management Bureau (ILMB) and Ministry of Forests and Range, and on MEMPR’s review of the referral responses from other Provincial agencies, MEMPR has identified that oil and gas is the primary industry activity taking place within the CEB and within the KRA.

[68]        Similarly concluding that a regional land-use planning process was not required before the government could make a decision on whether to proceed with PNG tenure dispositions, given the existing strategies in place to avoid or mitigate potential adverse impacts, the MEM and the OGC, “in the interest of relationship building, and to ensure that potential adverse impacts on the DTFN treaty rights are avoided or mitigated” offered two initiatives: a Cordova Embayment Boundary Information Sharing Process (ISP), and a Tenure Holders Group & Area Operating Protocol (the “operating protocol”).

[69]        The ISP contemplated the joint mapping of known interests within the CEB, such as wildlife, water, archaeology, cultural heritage sites, gravesites and existing and proposed PNG footprints, identifying potential key information gaps, working together to ensure the availability of resources in support of filling those gaps, and having this as a living document available to the consultation process when reviewing new PNG tenure requests or applications for activity.

[70]        The operating protocol proposal contemplated exploring the option of a tenure holders group to help ensure minimization of the development footprint, and inclusion of First Nations in the developmental planning process to minimize or avoid potential adverse impacts.

[71]        The Preliminary Assessment then reviewed the question of Boreal Caribou management before concluding as follows:

SUMMARY AND CONCLUSIONS

In addition to the information received from the DTFN during the review of the proposed parcels, MEMPR also considered other related information before the Crown, which includes, but is not limited to:

•         Fort Nelson Land and Resource Management Plan;

•         Moose Management Plan in the Peace Region;

•         The DTFN 1997 Traditional Use Study;

•         Information received as part of the Environmental Assessment Office review of the Encana Cabin Gas Plant; and

•         DTFN Ethnohistoric Study developed by the Provincial Attorney General at the request of MEMPR and provided to the DTFN for review and comment.

In considering all of the above information, MEMPR has made an assessment of known DTFN interests in relation to potential oil and gas activities which could take place on the lands within the CEB and is of the view that the impacts on DTFN treaty rights is anticipated to be low.  This conclusion is supported by the assessment which indicates that:

•         the existing oil and gas footprint within the KRA is estimated to be less than 1.1% and within the CEB is estimated to be less than 1.0%,

•         the anticipated future development of the shale formation would result in an oil and gas footprint within the CEB of less than 3.7% (in addition to the existing 1.0% in the CEB),

•         the principal industrial activity taking place in the CEB is related to oil and gas, and

•         the potential adverse impacts on DTFN treaty rights can be avoided or mitigated through existing strategies, tenure terms (caveats), the proposed information sharing process, and other potential options such as a Tenure Holders Group and/or an Area Operating Protocol.

(e)         Further Steps:  March – June 2010

[72]        By letter dated March 26, 2010, Ms. Mah-Paulson gave notice to the DTFN of the parcels that the MEM was now proposing to dispose of on June 23, 2010, advising:

Please note that the attached referral package only includes a portion of the deferred PNG parcels within the CEB which the Ministry believes, based on the Preliminary Assessment and the materials gathered in dialogue with the DTFN through the consultation process to date, could proceed to disposition pending the DTFN review and comments on these proposed rights and Preliminary Assessment.  We can confirm that no decision has been made on if these deferred parcels can proceed to disposition and that the remaining CEB deferred parcels will remain deferred at this time, pending further analysis.

It was this process that led to the disposal of the 21 parcels here at issue.  As noted, a further 31 parcels remained deferred.

[73]        Ms. Kyle wrote to Ms. Mah-Paulson on April 22, 2010, commenting on the Preliminary Assessment, and requesting an opportunity to meet with MEMPR representatives.  Ms. Kyle questioned the Ministry’s oil and gas footprint analysis in view of the conclusions in the MSES Rate of Disturbance Report.  Among other things, Ms. Kyle also took issue with the Ministry’s focus on petroleum and natural gas activities, maintaining that all development and activity, including forestry and agriculture, needed to be taken into account.  Ms. Kyle challenged the Ministry’s conclusion that the impacts to DTFN’s treaty rights were “anticipated to be low” and expressed surprise and dismay that the MEM had concluded that there was no need for a cumulative impacts study.  As well, Ms. Kyle expressed her complete disagreement with the assumption that regional land-use planning was not required because there were sufficient existing strategies in place.  She continued to request landscape-level planning for the area.

[74]        Ms. Kyle communicated the DTFN’s interest in discussing the ISP and area operating protocols that were suggested and put forward ways to make these processes more meaningful.  She then turned to the issue of boreal caribou before expressing concerns with some of the answers by the Minister to the questions raised by Chief Ahnassay.

[75]        Further concerns were expressed by Ms. Kyle in a letter addressed to the Minister dated April 26, 2010.  These included a concern that the MEMPR had failed to identify the thresholds or criteria being used to determine potential impacts to DTFN’s Treaty and Aboriginal rights, and the absence of any substantive plan or measure to address concerns at later stages in the decision-making process.

[76]        By now, the positions were entrenched.  Ms. Mah-Paulson wrote to DTFN counsel on April 30, 2010, confirming that, following a “detailed review and extended consultation process with the Dene Tha’ First Nation” (including the information in Ms. Kyle’s letter as of April 22 and April 26), the Ministry was of the opinion that it could proceed with the deferred parcels referred on March 26 for disposition on June 23, 2010.

[77]        Ms. Mah-Paulson acknowledged the DTFN’s objections and request for land-use planning and other study processes.  She reiterated that the Ministry did not share the view that these were necessary before decision could be made, as existing strategies were available to avoid or mitigate potential adverse impacts.

[78]        Ms. Mah-Paulson then addressed some of the particular concerns raised by Ms. Kyle, including the footprint methodology, noting that the Ministry did not consider the methodology used in the MSES Report to be reasonable. 

[79]        Ms. Mah-Paulson confirmed that the boreal caribou reports that Ms. Kyle had referenced had been reviewed and considered in determining which parcels could proceed to disposition, and enclosed a map identifying the proposed parcels and the overlapping boreal caribou core ranges.

[80]        Turning to the issue of a cumulative impacts assessment, Ms. Mah-Paulson expressed the view that the information used in the preliminary assessment provided a good indication as to the current and estimated future footprint from industrial activities, and reiterated that the Ministry had applied a precautionary approach.  She observed that there was little to no agriculture or forestry activity in the areas in question, confirming that natural gas and petroleum activity was the primary industry.

[81]        Ms. Mah-Paulson confirmed that all of the attachments to Chief Ahnassay’s August 2009 letter had been reviewed, but confirmed that the Ministry remained of the opinion that studies to assess those impacts were not required before the government decided whether to proceed with the parcels, as any adverse impacts on DTFN treaty rights could be avoided or mitigated through existing caveats (tenure terms) and by the OGC through its existing regulations, strategies and operational considerations.

[82]        With respect to the DTFN’s disagreement as to the sufficiency of two caveats initially proposed to be assigned to particular parcels, the Ministry had assigned additional caveats to reflect the DTFN interests.  Ms. Mah-Paulson also addressed at some length concerns regarding hunting and fishing, advising that the Ministry had assigned further caveats to deal with these concerns.  Those parcels that overlapped trap lines were given the following caveat:

Parcel overlaps a Dene Tha’ First Nation member trap line.  Engagement has been requested by the Dene Tha’ First Nation before applications are made to the Oil and Gas Commission.

[83]        Ms. Mah-Paulson then described additional caveats designed to address concerns about the potential impact on fishing, an historic trail, camps and cabins, and water supply.  She concluded by confirming that the Ministry was of the opinion that it had “met its legal obligations with respect to consultation and, as appropriate, accommodation, such that these parcels can proceed in the June 23, 2010 disposition.”

[84]        On May 11, 2010, Ms. Mah-Paulson and Mr. Paterson met with representatives of DTFN in High Level, Alberta.   One of the focal points of the discussion was the effect of the proposed parcel dispositions on caribou.  Ms. Mah-Paulson explained that they had relied on the MOE’s expert advice, and had set up a working group.  While there were no First Nations represented on the working group, Ms. Mah-Paulson noted that the broader governmental initiative on caribou would engage First Nations, and offered it to facilitate a meeting between the representatives on the working group, and DTFN.  Another focal point was the OGC’s process and whether it was capable of addressing DTFN’s concerns.  Ms. Mah-Paulson indicated that the Ministry was willing to coordinate a meeting among the DTFN, the OGC and the Ministry to discuss the linkages from the tenure process to the OGC’s application review process.  

[85]        There remained a fundamental disagreement between the parties.  The DTFN emphatically rejected the conclusions in the MEM’s Preliminary Assessment, and considered it critical that the Ministry withdraw the parcels until the consultation process was completed to the DTFN’s satisfaction.  They expressed the view that it appeared as though the Ministry had made up its mind long ago and was merely going through the motions.  In response, the Ministry reiterated an overview of the pre-tenure referral process, highlighting that it was intended to provide an opportunity for the First Nation to identify “high-level issues or concerns associated with the disposition of the subsurface tenure”, and that the Ministry did not know at that stage where, when, what or how development would occur.  Ms. Mah-Paulson went on to describe further the Ministry’s proposed information sharing process, the intent of which was “to assist in managing development in a way that allows the DTFN to continue to practice their treaty rights.”  The DTFN expressed an interest in participating in this process assuming appropriate terms of reference and funding, but did not agree that it answered the problem.  

[86]        In essence, they could do no more than agree to disagree.  On May 17, 2010, Ms. Kyle delivered a lengthy letter with extensive enclosures, she began the letter by expressing the DTFN’s 

…extreme dismay and frustration at MEMPR’s decision to post the Parcels for the June 23, 2010 disposition before answering the questions posed in our letter of April 22, 2010, or answering the questions we have raised in relation to the MEMPR’s draft Preliminary Potential Impact Assessment (the “Assessment”), or meeting with the MEMPR to discuss the Assessment.  It is critical that meaningful engagement occur in relation to the assessment of potential impacts.  Since, to date, this is not occurred, we reiterate our request made at the May 11th meeting that all of the parcels be withdrawn from the June disposition to permit a meaningful consultation and accommodation process to be undertaken.

[Emphasis original.]

[87]        Ms. Kyle then went on to set out her client’s position in detail.  Unswayed, Ms. Mah-Paulson responded by letter dated June 3, 2010, again stressing the proposed information sharing process as a means of focusing discussions on “strategies for managing development in a manner in which First Nations can exercise their Treaty rights”.  She further noted that the Ministry was interested in continuing the dialogue process with the DTFN to further address appropriate management and potential development of the Cordova Embayment shale formation.

[88]        But, in the meantime, Ms. Mah-Paulson confirmed by separate letter of the same date that the Ministry had made a decision to make the specified parcels available at the June 23, 2010 disposition, noting:

•         MEMPR is of the view that it had adequate information to make a decision on posting the parcels;

•         Additional caveats were added to reflect the DTFN hunting, fishing and/or trapping interests;

•         Information provided to MEMPR through the consultation process regarding the DTFN’s exercise of treaty rights overlapping the parcels have [sic] been made available to the OGC for any consultation with DTFN regarding natural gas and petroleum activities with respect to those parcels;

•         As identified in my April 30, 2010 letter to Mr. Friedman, some of the parcels will continue to be deferred for further analysis and to ensure conservation options for boreal caribou while further direction on the nature and extent of habitat protection for boreal caribou is developed; and

•         MEMPR has committed to continue to work with the DTFN in an information sharing process.

Ms. Mah-Paulson further confirmed that the deferred parcels would continue to be deferred pending further analysis.

[89]        The parties continued to exchange correspondence, and Ms. Kyle continued to make requests, without either side altering its position.  In the meantime, the Province established Resource Review Areas (RRAs) to protect boreal caribou.  All proposed natural gas and petroleum development within those areas would be deferred.  Two of these areas were located within the Caribou Calendar Core Range in the traditional territory of the DTFN, and encompassed approximately 40% of that range.  Although these RRAs were directly adjacent to the areas in which the 21 parcels were located, none of the parcels overlapped them.  

[90]        The disposition of 108 tenure parcels, including the 21 at issue as being within DTFN Traditional Territory, proceeded on June 23, 2010.

DISCUSSION

1.            The Competing Positions

[91]        The positions of the parties were clearly articulated in the consultation process described above.  

[92]        From the petitioner’s perspective, the Crown wrongly assessed the depth of consultation required by improperly limiting its focus to the reduction of the land base according to anticipated well infrastructure footprints, when what was required in the circumstances was consultation about the broader strategic implications of selling the tenures in view of anticipated shale gas development.  In particular, the Crown took too narrow a view by considering only the direct impact from the footprints of anticipated wells and associated infrastructure.  What it needed and failed to consider, the DTFN asserts, were the potential indirect, cumulative and derivative impacts to the environment and the exercise of the DTFN’s treaty rights that would flow from opening this portion of the Dene Tha’s ancestral trapping grounds to the potential for shale gas development.

[93]        The Crown’s position is that it fulfilled its duties in terms of its assessment of the depth of consultation required, its assessment of the impact, and the extent of its accommodation of the DTFN’s interests.  It, together with the other respondents, focused on the pre-tenure and post-tenure stages, much as the Consultation Agreement does.  From the Crown’s perspective, it is impossible to assess at the pre-tenure stage all of the potential indirect, cumulative and derivative impacts, because the extent of development is not yet known.  Exploration is just that.  What is important, according to the Crown and the other respondents, is that there is a process in place that provides for appropriate consultation and accommodation in the post-tenure stage, should further development be proposed and as its extent is understood.

[94]        Central to the concern of the DTFN is the prospect of the “death by a thousand cuts” that they submit will follow from a focus limited to direct impact.  This was discussed in Halalt First Nation v. British Columbia (Environment)2011 BCSC 945 (CanLII).  The problem is akin to what I described in Taseko Mines Limited v. Phillips2011 BCSC 1675 (CanLII)at para. 65, in the context of weighing the balance of convenience in an application for an interlocutory injunction temporarily restraining activity in a smaller area:

Each new incursion serves only to narrow further the habitat left to them in which to exercise their traditional rights.  Consequently, each new incursion becomes more significant than the last.  

[95]        Hence the focus of the DTFN to the broader strategic implication of the decision to sell rights that could lead to shale gas development, asking the question posed by Chief Ahnassay:  assuming development of shale gas resources, will there be enough land left within the vicinity of the parcels on which the DTFN can meaningfully exercise its Treaty rights now and into the future?

[96]        I will turn next to consider the standard of review to be applied to the Crown’s actions and decision.  Before doing so, I should note that among the many authorities to which I was referred during argument were two decisions of this Court:  Adams Lake Indian Band v. British Columbia2011 BCSC 266 (CanLII), and Halalt First Nation.  After the hearing of this matter, both of those decisions were reversed in the Court of Appeal: Adams Lake Indian Band v. Lieutenant Governor in Council2012 BCCA 333 (CanLII) (leave to appeal to SCC refused, April 13, 2013), and Halalt First Nation v. British Columbia2012 BCCA 472 (CanLII).  As a result, the parties delivered further written submissions concerning the effect of the judgments in the Court of Appeal.

2.            The Standard of Review

[97]        Reciting the law on this issue is not difficult.  Applying it in the circumstances of this case is not easy.

[98]        In Haida Nation at paras. 61-63, the Court explained that the standard to be applied to consultation decisions is bifurcated:

On questions of law, a decision-maker must generally be correct: for example, Paul v. British Columbia (Forest Appeals Commission), [2003] 2 S.C.R. 585, 2003 SCC 55 (CanLII).  On questions of fact or mixed fact and law, on the other hand, a reviewing body may owe a degree of deference to the decision-maker.  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.  The need for deference and its degree will depend on the nature of the question the tribunal was addressing and the extent to which the facts were within the expertise of the tribunal: Law Society of New Brunswick v. Ryan, [2003] 1 S.C.R. 247, 2003 SCC 20 (CanLII)Paul, supra.  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 reasonablenessCanada (Director of Investigation and Research) v. Southam Inc.1997 CanLII 385 (SCC), [1997] 1 S.C.R. 748.

[Emphasis added.]

[99]        This approach was followed by Neilson J. (as she then was) in Wii’litswx v. British Columbia (Minister of Forests),2008 BCSC 1139 (CanLII), [2008] 4 C.N.L.R. 315:

[15]      The existence or extent of the duty to consult or accommodate is a question of law, in the sense that it defines a legal duty. As set out above, it is based on the Crown’s assessments of the strength of the claim, and the potential seriousness of the impact of the infringement. Those assessments are questions of law to be judged on the standard of correctness. However, in that they are typically premised on an assessment of the facts, a degree of deference to the findings of fact of the decision maker may be appropriate. Thus, to the extent that this issue is one of pure law and can be isolated from issues of fact, the standard of review is correctness. However, where the two are inextricably entwined, the standard of review will likely be reasonableness. 

[16]      The adequacy of the consultation process is governed by a standard of reasonableness. There is some inconsistency in the authorities, however, as to the proper focus of that analysis.

[100]     West Moberly First Nations v. British Columbia (Chief Inspector of Mines)2011 BCCA 247 (CanLII), 18 B.C.L.R. (5th) 234, [2011] 3 C.N.L.R. 343 (leave to appeal to SCC refused) is a case that also involved Treaty 8 rights.  The Court of Appeal issued three separate judgments that took differing approaches to the question of the standard of review.  In the lead judgment, Finch C.J.B.C. did not directly address the question in relation to the scope of the duty to consult, but noted:

[141]   The question then is whether the consultation process was reasonable.  A reasonable process is one that recognizes and gives full consideration to the rights of aboriginal peoples, and also recognizes and respects the rights and interests of the broader community.

[101]     In his separate concurring reasons, Hinkson J.A. said this:

[174]   I accept, as did the chambers judge, the submission of the West Moberly that the appropriate standard of review in consultation cases for the Crown’s assessment of the extent of its duty to consult is correctness, and that the appropriate standard of review for assessing the process adopted for a particular consultation and the results of that process is that of reasonableness.

[102]      In her dissenting judgment, Garson J.A. approached the question this way: 

[188]   The Chief Justice described the fundamental issue on this appeal, as whether the Crown adequately consulted with the petitioners. I adopt for my analysis of this issue the framework generally set out in Taku River Tlingit First Nation v. British Columbia (Project Assessment Director)2004 SCC 74 (CanLII), [2004] 3 S.C.R. 550:

à  Did the Crown have a duty to consult, and if indicated, to accommodate West Moberly First Nations’ (“WMFN”) interests in hunting caribou? 

à  What was the scope and extent of that duty to consult and to accommodate WMFN?

à  Did the Crown fulfill its duty to consult and to accommodate in this case?

[103]     After describing the bifurcated standard explained by the Supreme Court of Canada in Haida Nation, Garson J.A. continued:

[193]   I agree with the dicta of Grauer J. in Klahoose First Nation v. Sunshine Coast Forest District (District Manager)2008 BCSC 1642 (CanLII), [2009] 1 C.N.L.R. 110, where he summarized and applied Haida Nation at para. 34:

As mandated in the Haida case, supra, the extent of the duty to consult or accommodate is a question of law to be judged on the standard of correctness, although it is capable of becoming an issue of mixed law and factto the extent that the appropriate standard becomes that of reasonableness. The adequacy of the consultation process is governed by a standard of reasonableness.

[Italic emphasis in original; underline emphasis added.]

[194]   In Beckman v. Little Salmon/Carmacks First Nation2010 SCC 53 (CanLII), [2010] 3 S.C.R. 103, the Court appeared to adopt a higher standard of review in assessing the adequacy of consultation (at para. 48):

In exercising his discretion under the Yukon Lands Act and the Territorial Lands (Yukon) Act, the Director was required to respect legal and constitutional limits. In establishing those limits no deference is owed to the Director.  The standard of review in that respect, including the adequacy of the consultation, is correctness.  A decision maker who proceeds on the basis of inadequate consultation errs in law.  Within the limits established by the law and the Constitution, however, the Director’s decision should be reviewed on a standard of reasonableness:  Dunsmuir v. New Brunswick2008 SCC 9 (CanLII), [2008] 1 S.C.R. 190, and Canada (Citizenship and Immigration) v. Khosa2009 SCC 12 (CanLII), [2009] 1 S.C.R. 339.  In other words, if there was adequate consultation, did the Director’s decision to approve the Paulsen grant, having regard to all the relevant considerations, fall within the range of reasonable outcomes? [Emphasis added.]

[195]   In my view, Beckman’s adoption of a higher standard was attributable to the fact that the case concerned the construction of a modern, comprehensive treaty; a precise document negotiated by sophisticated and well resourced parties.  In that case, the Crown argued that the treaty was a complete code and there was no obligation to consult beyond the treaty itself.  I would therefore distinguish Beckman.

[196]   Thus, I would apply a reasonableness standard to the question of the adequacy of the consultation where the historical treaty does not provide the degree of specificity necessary to ascertain the “correct” process.

[197]   As was held in Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council2010 SCC 43 (CanLII), [2010] 2 S.C.R. 650, at para. 74, “[c]onsultation 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”.  Compromise is a difficult, if not impossible, thing to assess on a correctness standard. 

[198]   In summary, the Crown’s determination of the scope and extent of its duty to consult must be assessed on a correctness standard.  But the third Taku question, as to the adequacy of the consultation and the outcome of the process, must be assessed on a reasonableness standard as those questions are either questions of fact or mixed fact and law.  The consultation process must also meet the administrative law standards of procedural fairness.

[104]     I pause, respectfully, to add my own comments to those of Garson J.A. concerning the conundrum posed by Justice Binnie’s choice of words in the Beckman decision when he stated that “a decision maker who proceeds on the basis of inadequate consultation errs in law”.  At first glance, this seems inconsistent with previous statements by the Supreme Court in cases such as Haida Nation and Taku River.  

[105]     I have already reviewed how, as discussed in Haida Nation, the standard of review of the question of scope and extent of duty can move from correctness towards reasonableness depending on the extent to which the decision inextricably combined questions of fact and law.  In Beckman, it seems to me, as in the judgment of Finch C.J.B.C. in West Moberly First Nations, we have a hint that the real question comes down to the adequacy of the consultation process which will itself, to an extent, determine the correctness of the scope.  In other words, if the process did not accomplish a reasonable result, then it was probably carried out pursuant to an incorrect assessment of its proper scope.  

[106]     One of the distinguishing features of this case is that, from at least the Crown’s perspective, the consultation process is fluid and ongoing.  From the perspective of the DTFN, however, that cannot cure the fact that it started out on the wrong foot because of a scope assessment that was wrong in law, judged on the correctness standard.

[107]     It is, however, clear to me from the evidence that the Crown’s determination of the extent and scope of its duty to consult was inextricably bound up with its assessment of the underlying question of the direct and potential impact of the 21 tenure sales on the DTFN’s treaty rights in the Key Response Area.  This question turns on factual analyses, as indicated in the competing impact/disturbance reports.  Thus, as suggested above, the issue of the scope and extent of the duty to consult in this case is intertwined with the issue of the adequacy of the consultation.  

[108]     Whether a duty to consult and, if indicated, to accommodate existed is clearly a question of law, and was never in doubt in this case.  Not only did the Crown acknowledge the existence of such a duty throughout, but the Crown had also entered into a Consultation Agreement with the DTFN aimed at covering the very sort of situation that arose.  But when it comes to the Crown’s assessment of the scope and extent of that duty, I conclude that in the circumstances of this case, the “correctness” of the Crown’s assessment depends upon the “reasonableness” of that assessment’s underpinning.  We have a question of mixed law and fact so the standard, in effect, becomes one of reasonableness as noted in the passage from Haida Nation quoted above.

3.            The Scope of the Crown’s Duty to Consult

[109]     DTFN submits that, as a matter of law, the proper scope of accommodation in the circumstances of this case must necessarily extend to the broader strategic implications of selling the tenures, including all direct, indirect, cumulative and derivative impacts of the proposed action.  I am unable to agree.

[110]     It is true that in Haida Nation, the Court stated that the Province had a duty to consult and perhaps accommodate on tree farm licence decisions, on the ground that they reflected:

…the strategic planning for utilization of the resource.  Decisions made during strategic planning may have potentially serious impacts on Aboriginal right and title.  [Para. 76.]

That statement was made, however, in the context of determining at what stage the duty to consult arose, not the scope of that duty.

[111]     DTFN also relied on the following passage from Rio Tinto Alcan v. Carrier Sekani Tribal Council2010 SCC 43(CanLII), [2010] 2 S.C.R. 650:

[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 titles [citation 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 (CanLII), [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 (CanLII), [2007] 1 C.N.L.R. 1, aff’d 2008 FCA 20 (CanLII), 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.)).

[112]     But once again, the context of that statement was different from the situation before me.  First, the Court was addressing the question of what government action engages the duty to consult.  There was never any doubt that the duty was engaged in this case.  Second, as the Court of Appeal points out in Halalt First Nation in relation to the same passage from Rio Tinto:

[132]   The reason for the concern was articulated by the Court in para. 47.  In such cases, current Crown conduct may constrain the ability of the Crown to respond appropriately in the future; it “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 owner of the Crown.  The aboriginal people would thus effectively lose or find diminished their constitutional right to have their interests considered in development decisions.”

The context for that concern was the example of a contract that transfers power over a resource from the Crown to a private party, thereby removing or reducing the Crown’s power to ensure that the resource is developed in a way that respects Aboriginal interests.

[113]     In my view, that concern does not arise in this case.  The consultation process, consistent with the Consultation Agreement, contemplated an ongoing, staged consultation involving different levels of government, but never leaving the ambit of the authority of the Crown.

[114]     The question before me, then, is different from that considered in cases such as Rio Tinto, Haida Nation and Klahoose First Nation.  Those cases make it clear that a duty to consult will arise in relation to strategic higher-level decisions notwithstanding the existence of later opportunities for consultation in the contemplated process.  Thus, in both Haida Nation and Klahoose First Nation, the Crown could not avoid consultation at the strategic higher-level decision stage by pointing to the existence of subsequent opportunities at the operational stage.  

[115]     What the cases do not say, however, as a matter of law, is what the scope of that first-stage consultation must be.  On the contrary, Haida Nation makes it clear in para. 45 that:

[e]very case must be approached individually.  Each must also be approached flexibly, since the level of consultation required may change as the process goes on and new information comes to light.  

[116]     In this case, the Crown seemed to conclude that the extent of its duty to consult at the pre-sales stage was towards the lower end of the Haida Nation spectrum.  In Haida Nation, the Supreme Court of Canada described the consultation spectrum at paras 43 and 44:

…the concept of the spectrum may be helpful, not to suggest watertight legal compartments but rather to indicate what the honour of the Crown may require in particular circumstances.  At one end of the spectrum like cases where the claim to title is weak, the Aboriginal right limited, or the potential for infringement minor.  In such cases, the only duty on the Crown may be to give notice, disclose information, and discuss any issues raised in response to the notice.  “‘[C]onsultation’ in its least technical definition is talking together for mutual understanding”: T. Isaac and A. Knox, “The Crown’s Duty to Consult Aboriginal People” (2003), 41 Alta. L. Rev. 49, at p. 61.

At the other end of the spectrum lie cases where a strong prima facie case for the claim is established, the right and potential infringement is of high significance to the Aboriginal peoples, and the risk of non-compensable damage is high.  In such cases the consultation, aimed at finding a satisfactory interim solution, may be required.  While precise requirements will vary with the circumstances, the consultation required at this stage may entail the opportunity to make submissions for consideration, formal participation in the decision-making process, and provision of written reasons to show that aboriginal concerns were considered and to reveal the impact they had on the decision.  This list is neither exhaustive, nor mandatory for every case.

[117]     The Crown submits that although it purported to assess the extent of its duty to consult as being towards the lower end of the spectrum at the pre-tenure stage, in fact the scope of consultation in which it engaged was at the middle level of the spectrum.  From my review of the consultation record, I agree.  The parties did not merely talk together for mutual understanding, nor did the Crown limit itself to giving notice, disclosing information and discussing issues.  The DTFN made extensive and wide-ranging submissions.  Each party prepared and exchanged Traditional Use Reports.  The DTFN commissioned and submitted its MSES Rate of Disturbance Report.  The MEM prepared and disclosed its Preliminary Assessment.  A great deal of information, economic, environmental, scientific and speculative, was exchanged.  The DTFN was not engaged in the actual decision-making process, but processes were put in place to involve the DTFN in ongoing development decisions that could give rise to potential adverse impacts on its treaty rights.  

[118]     In assessing the scope and extent of its duty to consult, the Crown was obliged to take into account the potential for adverse impact on DTFN treaty rights.  That is clear from Haida Nation and West Moberly First Nations.  The seriousness of the Crown’s proposed course of action on the Aboriginal people is one of the principal contextual factors that govern the content of the duty to consult, as noted in both Haida Nation and Mikisew Cree First Nation (at para. 63).  In this case, the Crown’s assessment in relation to “potential oil and gas activities which could take place on the lands within the CEB” was that “the impacts on DTFN treaty rights is [sic] anticipated to be low”.  

[119]     If that conclusion was unreasonable, then the Crown’s assessment of the scope of its duty to consult at the pre-tenure stage was, in my view, incorrect.  This is because the combination of the existence of established treaty rights with the potential for significant adverse impacts on those rights would give rise in law to a requirement for consultation at the high end of the spectrum.  The staged process of consultation contemplated by the Consultation Agreement could not limit this obligation.  If, however, the Crown’s impact assessment was reasonable in the circumstances, then it follows, I find, that its assessment of the scope of its duty at the middle level was correct in law.  In this regard, I concern myself with what the Crown did, rather than with what it said.

[120]     The Crown’s impact assessment must be viewed contextually, rather than taken in isolation.  It was not a once-and-forever conclusion.  The parties were engaged in an ongoing process and were subject to a Consultation Agreement.  The decision itself related to the sale of the subsurface rights that would constitute the first stage in potential shale gas development, but would not inevitably lead to such development throughout the affected area.  Nevertheless, the Crown addressed the potential impact of anticipated development and considered the availability of a process that would deal with subsequent stages depending upon what level of development would occur.

[121]     Given this context, it seems to me that it is particularly important to give some deference to the decision-maker as indicated by the authorities.  On the evidence, the Crown took into consideration a wide range of information and expertise concerning past, current and future effects.  This included:

•         experience from development in the Horn River Basin;

•         studies and mapping performed by the Ministry of Environment; 

•         The Fort Nelson Land and Resource Management Plan;

•         Mackenzie Valley Pipeline Traditional Use Study;

•         DTFN 1997 Traditional Use Study;

•         DTFN Traditional Land Use Report ;

•         DTFN Ethnohistoric Study developed by the Ministry of Attorney General;

•         DTFN MSES Rate of Disturbance Report (with the methodology of which MEM plausibly disagreed);

•         DTFN maps, materials and interviews relating to areas of DTFN traditional uses in relation to the parcels in question;

•         submissions and materials presented by Chief Ahnassay;

•         statements from discussions with individual members of the DTFN;

•         Moose Management Plan for the Peace Region; 

•         Boreal Caribou reports and other information from the Caribou Task Force;

•         existing and contemplated environmental and wildlife regulations; 

•         existing and anticipated oil and gas development in the Key Response Area; 

•         the existence of a consultation protocol in relation to any applications for approval of on-the-ground activities that might follow from the tenure sales; and

•         the availability of mitigation strategies in the parcel sale process.

[122]     All of this did not, of course, result in agreement with the position of DTFN concerning the potential for adverse impact, and the need for further study, particularly a cumulative impact study.  But agreement is not the test for scope of consultation.  As the Supreme Court of Canada noted in Beckman at para. 14:

The First Nation argues that in exercising his discretion to approve the grant the Director was required to have regard to First Nation’s concerns and to engage in consultation.  This is true.  The First Nation goes too far, however, in seeking to impose on the territorial government not only the procedural protection of consultation but also a substantive right of accommodation.  The First Nation protests that its concerns were not taken seriously — if they had been, it contends, the Paulsen application would have been denied.  This overstates the scope of the duty to consult in this case.  The First Nation does not have a veto over the approval process.  No such substantive right is found in the treaty or in the general law, constitutional or otherwise.

[123]     Given all of the information available, the Crown’s answer to Chief Ahnassay’s question, Is there enough land left within the vicinity of the Parcel Sales (assuming development of shale gas and other resources) on which our First Nation can meaningfully exercise our rights now and into the future, was, in essence, Yes — with the proviso that this assessment is based on current information and is subject to an ongoing process of consultation as development proceeds.  

[124]     Taking into account the context in which that assessment was made, I find that the Crown’s analysis of the risk of adverse impact was within the range of reasonable outcomes at the pre-tenure stage.  Accordingly, I find that, in law, the mid-level depth of the consultation in which the Crown engaged was consistent with its duty in the particular circumstances of this case, as well as with the Consultation Agreement between the parties.

4.            The Adequacy of the Consultation Process

[125]     In assessing the reasonableness of the process in which the Crown engaged, it is, once again, important to remember the context: the process is ongoing; consultation continues.

[126]     It is also important to consider the outcomes of the consultation process to date.  Of the 52 tenure parcels initially referred within DTFN Traditional Territory, 21 were sold, but the sale of the remaining 31 was deferred; their status remains deferred subject to further consultation.  With respect to the 21 that were sold, the Ministry added tenure terms (caveats) to reflect relevant DTFN hunting, fishing or trapping interests, and communicated information concerning overlapping DTFN treaty rights to the Oil and Gas Commission to assist in consultation concerning activity applications.  The MEM further made a twofold commitment beyond what the Consultation Agreement required:  (1) to continue to work with the DTFN in a formal and meaningful Information Sharing Process; and (2) to involve the DTFN in the development of a Tenure Holders Group and/or an Area Operating Protocol.  

[127]     In the meantime, certain concerns of the DTFN, common to all British Columbians, were being addressed outside the consultation process (but addressed nevertheless), including the establishment of Resource Review Areas to protect Boreal Caribou, and the application of the Environmental Protection and Management Regulation.

[128]     DTFN asserts that this process cannot be described as reasonable because it does not adequately address DTFN’s legitimate concerns.  In particular, DTFN complains that the prospect of meaningful consultation and accommodation at the OGC stage is extremely limited, while the prospect of accommodation at the appropriate strategic level is simply absent.  Moreover, DTFN argues that the ISP is not calculated to address the kind of cumulative impact assessment that is required.

[129]     I find that in this case, to this stage, the Crown has met the standard discussed by Finch C.J.B.C. in West Moberly First Nations, as quoted above, of giving full consideration to the rights of the Aboriginal peoples while also recognising and respecting the rights of the broader community.  That is not to say that I doubt the force of the DTFN’s concerns.  Ultimately, if the development of shale gas in the CEB is to continue and grow, the scope of the process of consultation and, if warranted, accommodation, will likely broaden.  It will not be enough to say that issues raised concerning, for instance, how the DTFN might benefit economically from the development should be referred to the Minister for Aboriginal Affairs and Reconciliation.  The Crown is not just the MEM or any other Ministry.  The Crown is the Province, and just as MEM and MOE cooperated in addressing concerns about Boreal Caribou, so it is that Her Majesty’s Ministers must work together in ensuring that appropriate accommodation is forthcoming.  It should not be for the First Nation to try to coordinate the Crown’s response through the Province’s various offices – see West Moberly First Nations at paras. 103-106, and Halfway River First Nation v. British Columbia1999 BCCA 470 (CanLII), 64 B.C.L.R. (3d) 206 at para. 177.  Reconciliation is the goal not of just one Ministry, but of the Crown.

[130]     Nevertheless, looking at the decision under review in what I have found to be its proper context, I conclude that the consultation process in which the Crown engaged was reasonable in the circumstances.  Although the Crown came to different conclusions from those of the DTFN, it recognized DTFN rights, fully considered them and acted reasonably in doing so.  Far from ignoring DTFN concerns, the Crown took a number of steps to address them as outlined above.  The caveats that the MEM attached to the tenure parcels are one example.  While it is true that they are not binding orders, they are observations of rights that can be ignored only at the peril of the Oil and Gas Commission, and set a baseline for ongoing consultation.  The Crown could certainly have taken a different approach, but the approach it took was, in my view, within the range of reasonable responses and was also consistent with its obligations under the Consultation Agreement in force at the relevant time.

[131]     Key to my conclusion in this regard is the context to which I have repeatedly referred, of an ongoing process.  As the Crown submitted, the disposition of the 21 parcels in question does not preclude further broad-based approaches to consultation concerning subsequent land use.  In my view, the disposition not only does not preclude such consultation, but emphasizes the need for it as matters progress.  It is with this in mind that I turn to address the future.

5.            Answering Chief Ahnassay’s Question

[132]     Mikisew Cree First Nation and West Moberly First Nations are both Treaty 8 cases.  Although neither concerned situations where the relevant consultation process was ongoing as in this case, both give helpful guidance concerning the appropriate content of future consultation.

[133]     Mikisew Cree First Nation confirms that Treaty 8 did not promise a continuity of 19th-century patterns of land-use (para. 32), and indeed potential land uses, particularly in terms of the exploitation of natural resources, have changed dramatically since then.  On the other hand, Treaty 8 was based on an assurance of continuity in traditional patterns of economic activity by the First Nations (para. 47).  The key is whether the proposed process is compatible with the honour of the Crown (para. 59).

[134]     West Moberly First Nations confirms the forward looking nature of the consultation process in circumstances such as these, as well as the appropriateness of taking into account the cumulative impact in the sense of recognising the existing state of affairs in order to address the consequences of what may result from the proposed programs (paras. 117-119).

[135]     I have concluded that the process in which the Crown has engaged to date complies with these guidelines in so far as the June 2010 dispositions are concerned.  But the appropriate depth of consultation will likely become greater, not lesser, as the process continues, as existing parcels proceed into development and further parcels are sought for disposition. The question posed by Chief Ahnassay has been answered for the time being, but it was neither possible nor feasible to answer it once for all time.  It remains alive and will have to be addressed again as development expansion is proposed, to ensure that the Dene Tha’ can continue to exercise their treaty rights meaningfully.  Only in that way will the honour of the Crown be maintained.

[136]     I do not consider it proper for me to attempt now to put in place a specific framework for the future that will satisfy the parameters I have discussed.  There may be many different approaches that would work, depending upon their content and the circumstances that arise, ranging from Chief Ahnassay’s three-pronged proposal to MEM’s proposed information sharing process and operating protocol. The Crown has indicated that it is quite prepared to engage in a broad-based approach to consultation concerning land-use as the process continues, and I take it at its word.

CONCLUSION

[137]     I have found that, in all of the circumstances, the Crown correctly assessed the scope and extent of its duty to consult with DTFN in relation to the disposition of the tenure parcels in question, engaging in consultation at the middle level of the Haida Nation spectrum.  I have further found that the consultation process in which the Crown engaged was reasonable in the circumstances, taking into account the required scope of consultation, the ongoing nature of the process, and the steps taken and available to mitigate potential harm.

[138]     I observe that the Crown’s constitutional obligations will continue, likely increasing in scope, as existing parcels proceed into development and further referrals are requested.  The decision under review, however, is affirmed with the result that the petition must be dismissed.

[139]     If the parties are unable to come to an agreement concerning costs, they are at liberty to apply.

“GRAUER, J.”

 

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