• Hupacasath First Nation v. The Minister of Foreign Affairs Canada and the Attorney General of Canada, 2015 FCA 4, FCA (Stratas, Nadon and Scott JJ.A.)
  • April 13, 2015 | Authors: Peter K. Doody; Isabella Mentina
  • Law Firm: Borden Ladner Gervais LLP - Ottawa Office
  • The Federal Court of Appeal held that Canada did not have a duty to consult Hupacasath First Nation before entering into a foreign investment treaty with China which might affect rights and interests that Hupacasath First Nation had over lands in British Columbia. The Federal Court of Appeal agreed with the Federal Court’s holding that the duty to consult was not triggered because the potential adverse effects of the Agreement were too speculative. The Court of Appeal defined “speculative” in the following way: “a conclusion is speculative when it is reached by way of a chain of reasoning where one or more of the links are assumptions, conjectures or guesses or where assumptions, conjectures or guesses are needed to join them.” It also held that, contrary to an earlier ruling of the Ontario Court of Appeal, the Federal Court did have the exclusive right to judicially review decisions of the federal government under the prerogative even when no regulation had been enacted, and limited the types of cases which were beyond the court’s jurisdiction because they were “non-justiciable”.

    Facts

    On September 9, 2010, Canada announced that it signed the Agreement between the Government of Canada and the Government of the People’s Republic of China for the Promotion and Reciprocal Protection of Investments (“Agreement”). Pursuant to this Agreement, Canada and China are to treat investors from the opposing country, as well as their investments, in accordance with principles of non-discriminatory treatment and protection from expropriation without compensation. It further provided that a violation of the Agreement can result in proceedings commenced before an arbitral tribunal and is some cases a monetary award.

    The Hupacasath First Nation (the “Band”), is a band under the Indian Act. The Band asserts Aboriginal rights over land on Vancouver Island. According to the Band, Canada had a duty to consult with it and accommodate its rights and interests before signing the Agreement. In sum, the band argues that:

    [...] the Agreement changes the landscape in the sense that it creates incentives for Canada to act in a manner that avoids breaches of the Agreement and resulting monetary awards. This, it says, may cause Canada to act in a manner that injures the appellant and its interests.

    Before the Federal Court, the Band sought a declaration that “Canada is required to engage in a process of consultation and accommodation with First Nations, including the Appellant, prior to taking steps which will bind Canada under the Agreement” and an order restraining the Minister from taking steps to bring the Agreement into effect.

    The Federal Court, per Crampton C.J. (at 2013 FC 900 (CanLII) ruled against the Band and held that Canada did not have a duty to consult. This conclusion was reached due to the “non-appreciable” and “speculative” nature of the potential adverse impact of the Agreement on the Band’s asserted interests and rights. In other words, the Band failed to establish a causal link between the Agreement and the alleged adverse impact. The Band appealed to the Federal Court of Appeal, where the Government raised jurisdictional and justiciability issues during oral argument.

    Exercises of pure Crown prerogative are reviewable in the Federal Court

    The Governor in Council’s power to make an order authorizing the Minister of Foreign Affairs to take the necessary actions to have the Agreement come into effect comes from the Crown’s prerogative powers. The Attorney General of Canada therefore asserted that Federal Courts do not have jurisdiction to review exercises of pure Crown prerogative.

    As a result of this argument, the Court had to determine “whether federal officials exercising a pure prerogative power are exercising a power conferred by or under an Act of Parliament or by or under an order made pursuant to a prerogative of the Crown within the meaning of subsection 2(1) of the Federal Courts Act.”

    Justice Stratas writing for the Federal Court of Appeal found that subsection 2(1) of the Federal Courts Act, had two plausible interpretations: (1) the Court has jurisdiction because the powers are “conferred [...] by [...] a prerogative of the Crown”; or (2) the Court does not have jurisdiction because the official is not acting under an order made under the prerogative (as per Black v Canada (Prime Minister), (2001), 54 OR (3d) 215).

    The plausibility of both interpretations led the Federal Court of Appeal to consider the context of subsection 2(1) and its purpose. After considering Parliament’s intent regarding the powers granted under the Federal Courts Act, the purpose of the Act and the potential outcome if it determined that pure exercise of prerogative powers are reviewable by Provincial Courts, the Federal Court of Appeal held that Federal Courts have jurisdiction to review exercises of jurisdiction or power rooted solely in the federal Crown prerogative.

    Very few cases are non-justiciable

    The Federal Court of Appeal then turned to the justiciability issue. In essence, the Respondent alleged that the Federal Court of Appeal did not have the power to consider the subject-matter on appeal due to its policy-oriented nature and its non-justiciability. According to the Respondent, the decisions in Canada (Prime Minister) v Khadr, 2010 SCC 3 and Operation Dismantle Inc v Canada, [1985] 1 SCR 441 establish that decisions taken pursuant to Federal Crown prerogative are reviewable only where Charter rights are in issue. Although the Federal Court of Appeal recognized that Charter cases are justiciable even where government action stems from an exercise of Crown prerogative, the Court did not accept that all other exercises of Crown prerogative are not justiciable.

    The source of government power, whether statute or prerogative, is not determinative of justiciability. The Federal Court of Appeal noted that the category of non-justiciable cases is very small and generally limited to exercises of executive power with an ideological, political, cultural, social, moral and historical component. In this particular case, the Band:

    [...] alleges that, regardless of the factors prompting the Agreement, the decision of the executive to bring the Agreement into effect would be unacceptable and indefensible because the appellant has enforceable legal rights to be consulted before that happens.

    The Federal Court of Appeal found that the issue depended on whether or not the Band had the legal rights it asserted. The determination of whether or not legal rights exist in these circumstances is justiciable, and as such the Respondent’s justiciability objection was found to have no merit.

    A potential harm to an aboriginal right is “speculative” (and no duty to consult arises) when the submission that there is an effect on those rights relies on “assumptions, conjectures, or guesses”

    The Federal Court of Appeal agreed with the Federal Court’s holding that the duty to consult was not triggered and the potential adverse effects of the Agreement were too speculative. The Federal Court of Appeal stated:

    [...] there is no evidence deserving of sufficient weight that these agreements are causing or might cause Canada to make decisions that are contrary to law. In particular, there is no evidence that those agreements are causing Canada to make decisions that do not respect Aboriginal rights.

    ... At this time, all we can do is imagine decisions or events and impacts from them that might or might not happen as a result of the Agreement. However, the duty to consult is triggered not by imaginings but by tangibilities.

    Further, Justice Stratas stated:

    The appellant defines “speculative” as situations where “there is no reasonable basis to conclude that an impact might occur.” Applying that definition in this case, the appellant says that there is a reasonable basis for concluding that an impact caused by the Agreement might occur.

    What is missing from the appellant’s definition of “speculative” is the idea of assumption, conjecture or guesswork. A conclusion is not speculative when it is reached by way of a chain of reasoning all of whose links are proven facts and inferences, joined together by logic. A conclusion is speculative when it is reached by way of a chain of reasoning where one or more of the links are assumptions, conjectures or guesses or where assumptions, conjectures or guesses are needed to join them.

    ... In short, the appellant has failed to show, in the words of Rio Tinto at paragraph 45, “a causal relationship between the proposed government conduct or decision and a potential for adverse impacts on [its] pending Aboriginal claims or rights” that rises above the speculative.

    If the appellant’s definition of “speculative” were accepted, then just about every decision or action by governments would trigger the duty to consult. Governments announce high-level policies all the time. For example, often measures are proposed to encourage Canadians and others to invest in Canadian businesses and developments, just like the Agreement before us. Does the duty to consult arise every time the government intends to announce measures of that sort?

    Taken to its extreme, the appellant’s position would require the Minister of Finance -before the annual budget speech in the House of Commons, on every measure in it that might possibly affect the investment and development climate - to consult with every First Nation, large or small, whose claimed lands might conceivably or imaginatively be affected, no matter how remotely, no matter how insignificantly. Such a tenuous triggering and aggressive application of the duty to consult would undercut one of its aims, namely respect for “countervailing Crown interests” - in this example, the Crown’s interest in workable governance: Rio Tinto, supra at paragraph 50.

    Justice Stratas also distinguished Mikisew Cree Nation v. The Governor General in Council et al., 2014 FC 1244 (CanLII), the case in which Justice Hughes of the Federal Court granted a declaration that a duty to consult the Mikisew Cree First Nation before Parliament enacted laws which affected waterways in the Mikisew Cree First Nation (the amendments to the Fisheries Act). Justice Hughes held that the claim of the First Nation, that it would be harmed, was not speculative where there is a “potential existence” of a harm. He then found, on the evidence, a sufficient potential risk to the fishing and trapping rights of the First Nation that a duty to consult had been triggered. Justice Stratas noted that Hughes’ decision was not binding on the Federal Court of Appeal. He also noted, however, that he agreed with Justice Hughes’ statement that the “potential existence” of a harm was sufficient to trigger a duty to consult. He distinguished the case on the basis that Justice Hughes found, on the evidence, “a possible effect that went beyond the appreciable and the speculative”.

    Consequently, the Federal Court of Appeal held there were no grounds to set aside the judgment of the Federal Court and dismissed the appeal with costs. The sixty days to seek leave to appeal to the Supreme Court of Canada has expired and no application for leave has been filed.

    http://www.canlii.org/en/ca/fca/doc/2015/2015fca4/2015fca4.html