The Consultation Conundrum: Examining Aboriginal consultation in Alberta

The Consultation Conundrum: Examining Aboriginal consultation in Alberta

With rising global energy demand, and Canada’s ability to service that demand, the ability to properly consult and engage with Aboriginal communities is vital. Canada must expand its capacity to export oil and natural gas to growing Asian markets, and building that capacity comes down to effective consultation with First Nations.

A failure to consult with Western Canada’s First Nations communities could have dire repercussions for proponents of pipeline projects through Alberta and British Columbia, and other natural resource projects.

Canada’s energy industry is dependent on overcoming challenges associated with resource development projects and Aboriginal consultation. Aboriginal relationships are of incredible importance to our economy, especially in the context of current resource development projects and Canada’s need to get its products to market.

In August, the Government of Alberta released the Government of Alberta’s Guidelines on Consultation with First Nations on Land and Natural Resource Management, as a supplement to the government’s new Policy on Consultation with First Nations on Land and Natural Resource Management released in 2013. No government in Canada, including the federal government, has gone as far as the Government of Alberta in attempting to create a more centralized, standardized, and government-controlled process of consultation.

However, feedback from Treaty 6, Treaty 7 and Treaty 8 First Nations is that they are opposed to the policy and guidelines on the grounds that they were not properly consulted and that they have specific issues with the policy and guidelines.

Problems exist on both sides of the table, with industry and First Nations often holding conflicting concerns.

Why cannot consultation occur organically, and what is the root of the issue? It seems that most of the problems can be broken down to issues of clarity and transparency.

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Duty to consult

The Supreme Court of Canada’s decisions regarding the Haida and Taku River in 2004, as well as the Mikisew Cree decision in 2005, established that the Crown has a duty to consult and accommodate when there are actions that might adversely impact Aboriginal or Treaty rights. While the need was recognized, there was a lack of detail surrounding the ‘how’.

On the one hand, a streamlined and centralized process that simplifies the process of consultation and commits projects to timelines could improve certainty for both industry and First Nations groups, while reducing administrative costs and delays. On the other hand, this process may be too restrictive, and may be attempting to apply a one-size-fits-all approach to a very diverse set of groups, projects, and circumstances that require careful case-by-case analysis.

Problems exist on both sides of the table, with industry and First Nations often holding conflicting concerns.

Implications of Tsilhqot’in v.

British Columbia decision In June of this year, the Supreme Court of Canada unanimously granted the land claim of the Tsilhqot’in, a B.C. First Nation, ending a decades long battle over a 1,700-square-kilometre area in central British Columbia.

The decision not only granted the land claim to the Tsilhqot’in, but also discovered a Provincial breach in duty to consult. The Court determined that Canadian governments must be able to show compelling reasons to “justify any incursions on Aboriginal title lands.” It grants extensive Aboriginal rights to a broader swath of traditional territory, above and beyond what British Columbia’s Court of Appeal granted— which was title to specific places that were continually occupied.

The decision also established the conditions Aboriginal groups must meet to present land claims outside of formal treaties. Treaty rights refer to the rights laid out contractually between First Nations and Canada, going back to as early as 1701 to encourage peaceful relationships between the two parties. While all treaties in Canada vary, they commonly address reserve lands, farming equipment and animals, annual payments, ammunition, clothing, and certain rights to hunt and fish. Some treaties involved ceding First Nations land in exchange for these rights.

Treaty rights are formally protected under the Constitution Act, 1982 (section 35).

In areas where treaties were never signed and Aboriginal claims were not fully resolved, some First Nations groups assert that, because the land was not surrendered to the Crown, they still hold Aboriginal title over these lands. The decision, then, is significant for Canadian First Nations in general because it sets a precedent for the hundreds of unsolved land claims in British Columbia, and across Canada.

The decision will likely instigate more land-based claims nationally, as it established clarity on Aboriginal title, defining it as “control of ancestral lands and the right to use them for modern economic purposes, without destroying those lands for future generations.”

From “consult” to “consent”: Implications for Canadian companies The decision is not only a gamechanger for Aboriginal communities, but also for the government and the Canadian resource sector. The main implication is that the decision will further complicate approvals for Canadian resource projects, most notably Enbridge’s Northern Gateway pipeline, which has a proposed route that crosses at least four territorial claims. It means that economic development on First Nations land proposed by government or industry requires explicit Aboriginal consent,

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where the Supreme Court’s expanded concept of land title is clearly established.

The ruling shifts the government’s responsibility from one of consultation to one of actively seeking consent. Now that the Tsilhqot’in hold the rights to that land, they have a right to determine “the uses to which the land is put and to enjoy its economic fruits.” If the group does not consent, the government is only able to proceed with a project if it can justify its actions under the constitution, such as reconciling Aboriginal interests with the broader public good. Therefore, Aboriginal groups do not have a complete veto right, but the government is required to meet a higher threshold when intervening without consent.

The implications of the decision vary greatly from province to province.

While the Supreme Court decision is historic and certainly carries significance, provinces like Alberta that have established treaties with First Nations communities are relatively unaffected. In these areas, the implications of the decision are severely limited. Other provinces, however, such as British Columbia, that have unresolved land claims and most treaties will not truly feel the impact of the decision.

Alberta’s Consultation Guidelines – a review During the past two years, Alberta’s approach to consultation has seen many significant developments, including the release of the new Policy on Consultation with First Nations on Land and Natural Resource Management (2013), which replaced the 2005 policy, as well as the release of the Government of Alberta’s Guidelines on Consultation with First Nations on Land and Natural Resource Management (2014) under the 2013 policy, which replaced the 2007 guidelines. Under this new policy, the Alberta government also created the Aboriginal Consultation Office

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(ACO), which reports to the Ministry of Aboriginal Relations and is responsible for the assessment, management, and execution of the consultation process.

The three most significant features of the new policy and guidelines are the creation of the Alberta Consultation Office (ACO), the Alberta Consultation Levy Act (ACL), and the sector-specific consultation matrices.

The Alberta Consultation Office (ACO) The ACO is a centralized body that reports to the Ministry of Aboriginal Relations, and is responsible for conducting and monitoring the consultation process. Its mandate includes determining the need to consult, the depth of consultation required, supervision of all consultation related activities, as well as determining the level of accommodation required. A centralized consultation office allows for a more streamlined process, and strengthens the role of the government in the process.

Under the new consultation guidelines and matrices, proponents will apply to the ACO for consultation assessment, at which time the ACO will conduct a pre-consultation assessment within 10 working days to classify any potential effects of action on treaty rights and traditional uses in three categories: Level One: no adverse impact, no consultation Level Two: low adverse impact, requires consultation Level Three: significant or permanent adverse impact, requires consultation In the case of a Level Two or Level Three project, the potentially affected First Nations groups will be notified of the projects, and a response from the groups is required within 10 working days, with the possibility of an extension in the event of First Nations groups presenting other potential

impacts that were not addressed in the pre-consultation assessment.

The sector specific consultation matrices are helpful in determining the magnitude of potential impacts.

One of the greatest impacts of the creation of the ACO is its effect on the role of the Alberta Energy Regulator (AER). Under the new policy and guidelines, the AER has no jurisdiction to assess the adequacy of Crown consultation.

Sector-specific consultation matrices The sector-specific consultation matrices outline activities in various sectors, including pipelines, petroleum, natural gas and oil sands project development, that may require consultation. The matrices also outline projects that may not, or will definitely not, require consultation.

The matrix was established to aid stakeholders in understanding consultation expectations and managing timelines, with the goal of increasing the transparency of the process, and ensuring

that the resources of First Nations, industry and government are being used in the most efficient way possible.

Aboriginal Consultation Levy Act (ACL) One missing factor in adequate consultation has been the lack of capacity funding for First Nations, an issue that the Aboriginal Consultation Levy Act (ACL) was intended to remedy. The ACL exists to increase funds that enhance First Nations’ ability to effectively consult, through training and other project costs through a program funded through a levy on industry. The intention of the ACL is to address issues of the capacity of First Nations groups to engage in consultation. Under section 3 of ACL, project proponents are required to pay consultation levies into the Aboriginal Consultation Fund as part of the approval seeking process for project development. Under the new levy act, industry proponents would pay

into a fund managed and administered by the ACO. The ACO would then distribute funds to First Nations to enhance consultation capacity and offset the costs of engagement, for purposes such as training and other project specific costs.

Section 8 states that project proponents may be required to provide information such as records and copies of agreements, including third party information, relating to consultation capacity.

The Ministry of Aboriginal Relations has contracted E&Y as a third party consultant to help assess the levy, including capacity and funding needs of First Nations.

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Alberta’s Consultation Guidelines – an assessment Clarity

There seems to be an obstacle to reaching consensus on definitions of consultation and treaty rights. First Nations groups showed concern that there was no clear definition of consultation, while the Government of Alberta counters that they use the following definition, as defined by the courts: “Alberta consults on First Nations’ Treaty rights to hunt, fish and trap for food, as well as on traditional uses. The nature of First Nation consultation in Alberta and the determination of its adequacy depends on specific factors such as project scope, the extent of the potential adverse impact, the Treaty rights and traditional uses that could be adversely affected, and the specific resource development activities involved.”

First Nations groups are also concerned that the Government of Alberta uses a narrow definition of treaty rights in the new guidelines, while the Government of Alberta argues that they are consistent with the Supreme Court’s case law on consultation. Another concern is that the guidelines do not address the protection of sacred sites, and that these areas are not specifically dealt with in the consultation process.

The guidelines also do not take into consideration cumulative effects of all projects planned and occurring in a geographic region or traditional territory, because not all impacts are location specific.

In order for consultation to be effective, there needs to be a definition of a ‘meaningful’ consultation process that has been agreed to by all parties. There needs to be clear definitions of treaty rights as well as traditional territories.

Timelines

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Timelines are a huge point of contention for industry and First Nations groups. While industry is concerned that there are too many caveats in the guidelines that allow for extensions of timelines, reducing project predictability and consistency , First Nations groups expressed concern that the timelines, as stated in the

guidelines, do not allow for meaningful consultation. Industry also expressed concern that the conditions for extending the timelines are too vague.

Consultation process timelines are helpful but the clock starts ticking as soon as the ACO makes a determination on the level of consultation that is required. The problem is that with some industry clients there is often a gap between planning Aboriginal consultation and execution of Aboriginal consultation.

Under these timelines, the only qualified reason for a delay is administrative: “the application or proponent information is deemed incomplete.” The guidelines need to account for the time it takes to properly allocate resources (staffing, expertise) and carry out consultation procedures, making the timelines appear unrealistic or unforgiving to what should be a process largely based on partnership and relationship building. Industry must be able to depend on the ability of the ACO to meet its own deadlines; if it is unable to do so, proponent project deadlines will also need to be altered.

Alberta must give more assurances that they have the capacity to meet the timelines they’ve stipulated.

Capacity funding The levy by far represents the greatest unknown within the new guidelines.

There is uncertainty and ambiguity within the levy act, particularly over what activities the levy fund is intended for and what the monetary values are expected to be. The ACL was put into effect with very little consultation with First Nations communities, and most groups only came to know of its existence after it was already legislated. The consultation with communities that did exist only gave the communities 8 days to respond to the province’s draft of the policy. The act was passed prior to the consultation conducted among First Nations groups over the new policy.

Another concern is the method of funding. Prior to the ACL, a First

Nations group would conduct an estimate of the necessary capacity funding for a particular consultation process for a project, and the proponent would provide the First Nation with the agreed upon sum. Under the ACL, however, the government is responsible for unilaterally determining the sum of the funding, and how it is distributed, and then notifies the proponent of the amount they are to provide, without the input of the First Nations group.

Decisions made by the Ministry of Aboriginal Relations regarding the levy are not subject for review.

There are industry concerns that the openness of the levy will risk some of their Aboriginal relationships; if one First Nation can view what a project proponent provided in terms of capacity funding to another First Nation, they may demand more funding, despite the fact that funding will vary across projects. If such an issue occurs, there is also the risk of relationship becoming damaged if a project proponent denies requests for more funding. Alternatively, the project proponent risks undermining the provincial government if it acquiesces requests for funding beyond what is determined by the government.

Capacity funding is inherently broad and case specific, resulting in a huge variance of funding among different Aboriginal communities and different projects. Capacity funding is an issue of sovereignty between the project proponent and the First Nation; funding should not be pooled and then distributed by the ACO. Moreover, how the ACO will maintain transparency and reporting surrounding the levy and other monetary matters needs to be made available.

Transparency of the ACO When the ACO is contacted and provided with an overview of the proponent/project and location, the ACO makes a determination of the level of consultation, as well as which First Nations should be consulted. While the sector-specific consultation matrices exist to help guide this process, the ACO has the authority to override this and to fold the project into whichever category of consultation it deems appropriate. We would like to see this process become more transparent with the consultants representing industry able to access the maps that the ACO

uses to determine potentially affected First Nations.

The ACO needs a public facing presence that citizens and corporations alike have the ability to access, ensuring straightforward and transparent accessibility of documents, consultation information, approvals and other decisions. Industry is required to draft consultation logs that are shared with the ACO. Though large amounts of the information in these logs must be confidential, the ACO should consider allowing abridged or edited versions to be made public. This would benefit many communities by allowing them to assess the consultation processes of fellow First Nations.

While the centralized process of the ACO helps to reduce uncertainty and create a consistent process, a clear explanation of how the ACO defines the scope and adequacy of consultation, including traditional territory and consultation maps, which First Nations are consulted, and what the scale of the project is, will help increase both industry and First Nations buy in to the process.

Flexibility The ACO has unnecessarily high levels of flexibility to override sector-specific guides and matrices for consultation; in all cases the ACO retains the right to modify the level of consultation.

This presents a major issue to project proponents. Most infrastructure projects require detailed planning involving multiple company divisions alongside thorough time and dollar assessments. The ACO has presented the sector-specific guides and matrices as a means of consistency for industry.

However, the ACO’s ability to override and fold projects into any category of consultation they deem fit means a project proponent’s time-consuming planning could be all for naught. In simplest terms, project proponents need definitive guidance on project

levels—they need to know who will be consulted, for how long, and with what level of detail/action required.

First Nations “Buy-In” While the grand purpose of the ACO and the new guidelines was to create a smoother and more predictable provincial consultation process, it has been vehemently opposed by almost every band in Alberta.

Many of Alberta’s Aboriginal communities feel that the new process is being dictated to them and that they were not an adequate partner in coming up with the new policy. Many of the Nations that have extensive long standing relations with industry have their own engagement systems in place that they have spent years refining, and that they believe work for them.

There is a fear that falling in line with this policy may mean giving too much control of the process to the government, and begs the question: is it really consultation when one of the parties fundamentally disagrees with the process? Chief Allen Adams of the Athabasca Chipewyan First Nation has been particularly vocal about his disapproval of the process: “It’s obvious… there has not been adequate consultation to thoroughly understand the long-term impacts. Government deals with our rights by ‘ticking boxes’ and not dealing with the real issues.”

Aboriginal feedback should be catalogued and a report card issued that allows comparison across different consultations. This would allow both the ACO and industry to assess the success and failures of consultation.

This score would be provided by the First Nation community engaging in consultation. Instituting Aboriginal feedback into a practical tool for monitoring consultation would enhance First Nations buyin by proving that feedback is being considered.

While the grand purpose of the ACO was to create a smoother and more predictable provincial consultation process, it has been vehemently opposed by almost every band in Alberta.

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Sharing the Wealth There are two major ways in which a wealth sharing agreement between First Nations and project proponents can be established: • Corporate payments to affected First Nations communities which include provisions for capacity funding such as training and subcontracting opportunities, otherwise known as Impact Benefit Agreements • Government resource revenue sharing agreements An Impact Benefit Agreement (IBA) is a bilateral contract made between a First Nations community and a company that provides Aboriginal consent for a project to proceed. Many modern land claims leave a provision for the negotiation of an IBA, especially in extractive industries, and many of these claims are expressive in identifying the need for IBAs. How do they operate within the landscape of government designed consultation? The Crown cannot delegate it’s authority to consult, so while a company can negotiate an IBA it cannot fulfill the duty to consult as framed by the government. However, the government is able to delegate some of the procedural elements of consultation to industry, and in practice, the majority of the obligation falls to industry, so many companies take it upon themselves to negotiate IBAs as proactive consultation.

IBAs vary immensely from company to company, and are confidential and custom made. While IBAs are a useful tool for some industry proponents as a method of building relationships and aiding capacity, they are time-intensive to negotiate and are therefore difficult to use in short or medium-term projects.

The value of resource revenue sharing agreements over impact benefit agreements is becoming increasingly clear, particularly because of their

simplicity and transparency—two articles inherently lacking in IBAs. Most models are based on percentage sharing that is transferred openly from provincial or territorial governments to Aboriginal governments. This not only provides First Nations with a tangible return in resource development, but also provides Aboriginal communities with greater incentives to engage in to open and accountable business practices, and provides them with the ability to address major local issues such as infrastructure.

There is no standard approach to resource revenue sharing, and governments are not required by law to provide compensation for Aboriginal communities affected by development.

The Supreme Court of Canada’s decision on Tsilqot’in, however, made clear that the landscape is shifting in favour of enhanced collaboration between Aboriginal communities and the government.

Alberta and Saskatchewan are the only two provinces in Canada that are opposed to revenue sharing models.

While Nova Scotia, New Brunswick, PEI, Ontario, Southern Quebec and Manitoba have no fixed policy on revenue sharing. Labrador, Northern Quebec, Yukon, NWT and Nunavut use revenue sharing models based on modern treaties. British Columbia uses a model based on project revenue sharing.

Past attempts by the business community to enter into revenuesharing and impact benefit agreements with communities during resource development projects has led to frustration, as these businesses shoulder the costs of making deals work.

Businesses should not be responsible for the entire cost of meaningful consultation and project partnership with First Nations.

For years, the concept of resource revenue sharing has been contentious, and yet it represents the key to unlocking agreement among First Nations and industry.

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For years, the concept of resource revenue sharing has been contentious, and yet it represents the key to unlocking agreement among First Nations and industry: it is the price that Aboriginal communities require in order for them to support development.

In December 2014, the new National Chief of the Assembly of First Nations, Chief Perry Bellegarde stated, “if our lands and resources are to be developed, it will only be done with our fair share of the royalties, with our ownership of the resources and jobs for our people. It will be done on our terms and our timeline.”

Aboriginal consultation and engagement is required by law, but if industry and government is seeking to simplify the barriers they face in effectively consulting First Nations, such as litigation and project stalling, they should seek to make Aboriginal groups partners in development.

Key Criteria for Effective Consultation in Alberta

• C larification on how the ACO defines as the levels of impact, the scope and adequacy of consultation, including traditional territory and consultation maps, which First Nations are consulted, and what the scale of the project is, which will help increase both industry and First Nations buy in to the process • R ecognize the importance of resource revenue sharing and begin to establish a provincial resource revenue sharing framework in full consultation with Alberta First Nations and industry, possibly that allocates a fixed percentage of resource revenue to affected Aboriginal communities - Consider developing a hybrid between local and general models that allocates a fixed percentage of resource revenue between a general Aboriginal fund and a fund earmarked for specific investments, such as infrastructure repair, education and training, or additional investments into capacity funding • G reater emphasis on long-term relationship building prior to initiating project applications, and greater emphasis on win-win outcomes, through investing more attention to each specific community’s culture, language, traditions, and protocols • I dentification of industry needs (relationship establishment, certainty for investors, locally based skilled workforce) and First Nation needs (involvement in assessment, training and employment opportunities, business opportunities, and revenue sharing) • View consultation guidelines and policy as just the minimum effort required for consultation • Ongoing monitoring of outcomes and participation, usage, identification of needed adjustments to the guidelines • Regular training program for industry and First Nation consultation offices to ensure that everyone is using similar terms of reference The release of the new consultation guidelines is intended to provide further clarification to all parties of the Government of Alberta’s formal consultation policy of 2013. The new policy and guidelines, and its key features including the levy, the creation of the ACO, and the sector-specific consultation matrices, have the goal of imposing greater certainty and efficiency, yet if they are not widely accepted by all parties then will there be any tangible progress?

While industry does not owe First Nations a duty to consult in the same way that government does, project proponents are often in a better position to consult with and accommodate First Nation concerns. The most crucial development blocking the path to finding the most effective consultation is to shift the fundamental process away from one of confrontation to one of partnership and the creation of win-win situations, and away from a veto right to a right in partnerships.

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Works cited

Coates, Kenneth, “Sharing the Wealth: How resource revenue agreements can honour treaties, improve communities, and facilitate Canadian development,” Macdonald-Laurier Institute, January 2015.

Coates, Kenneth and Dwight Newman, “The End is Not Nigh: Reason for alarmism in analysing the Tsilhqot’in decision,” Macdonald-Laurier Institute, September 2014.

Gibson, Ginger and Ciaran O’Faircheallaigh, “IBA Community Toolkit: Negotiation and Implementation of Impact Benefit Agreements,” The Walter & Duncan Gordon Foundation, March 2010.

Land, Lorraine, “Creating the Perfect Storm for Conflicts Over Aboriginal Rights: Critical New Developments in the Law of Aboriginal Consultation,” The Commons Institute, January 27, 2014.

Millen, Roy and Katie Slipp, “Centralizing the Duty to Consult: Alberta’s New Aboriginal Consultation Office,” Blake, Cassels & Graydon LLP, November 21, 2013.

Newman, Dwight, “The Rule and Role of Law: The Duty to Consult, Aboriginal Communities, and the Canadian Natural Resources Sector,” Macdonald-Laurier Institute, May 2014.

Weber, Bob, “Alberta first nation waits on province’s next move after losing oilsands review,” Global News, January 8, 2015.

Aboriginal Affairs and Northern Development Canada, Government of Canada.

“Aboriginal Consultation Levy Act,” Ministry of Aboriginal Relations, Government of Alberta.

“The Government of Alberta’s Guidelines on Consultation with First Nations on Land and Natural Resource Management,” Ministry of Aboriginal Relations, Government of Alberta, July 28, 2014.

“The Government of Alberta’s Policy on Consultation with First Nations on Land and Natural Resource Management, 2013” Ministry of Aboriginal Relations, Government of Alberta, June 3, 2013.

“What We Heard: First Nations Consultation Guidelines, Matrices and Levy Concepts,” Alberta Aboriginal Relations Spring 2014 Public Engagement.

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This project would not have been possible without the leadership of our Aboriginal Opportunities Committee, Canada’s longest standing Chamber committee on Aboriginal affairs, which consistently provides the Chamber with insight and direction on Calgary’s most substantial Aboriginal issues in labour, education, and natural resource development. We would also like to express our profound gratitude to the countless Calgary Chamber members who contributed their knowledge and experiences in Aboriginal consultation to guide this effort, making clear the steps we need to take to improve collaboration between Alberta’s First Nations and Métis communities and the Calgary business community.

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