Federal Court Of Appeal Affirms Canada Has No Duty To Consult BC First Nation Before Ratifying Investment Agreement With China

Facts

In 2012, Canada signed a Foreign Investment Promotion and Protection Agreement with China1 to establish a legal framework for bilateral investment (the Investment Agreement). The Hupacasath First Nation (HFN), who assert aboriginal rights, including self-government rights and title, over roughly 573,000 acres of land on Vancouver Island, took legal action against Canada for failing to consult prior to signing the Investment Agreement.

The HFN applied to the Federal Court2 for a declaration to prevent the Investment Agreement from being ratified and coming into force because of the failure to consult and alleged potential impacts on their aboriginal rights.

The Federal Court held that the Investment Agreement could not harm the HFN's asserted rights and interests, that any impacts on these rights were "non-appreciable" and "speculative," and that Canada was not in violation of its obligations.3 This decision has now been affirmed by the Federal Court of Appeal.4

Issue

The issue before the Federal Court of Appeal was whether the Federal Court correctly held that Canada did not have a duty to consult HFN prior to ratifying the Investment Agreement with China.

Decision

Prerogative Power/Jurisdiction

As a preliminary matter, the court addressed whether it had jurisdiction to decide the issue.

On appeal, Canada raised a new objection on the basis that the Crown had prerogative powers to enter into international treaties and agreements and the exercise of these powers could not be reviewed by the Federal Court. The Federal Court of Appeal concluded, however, that it did have jurisdiction and Canada's exercise of its prerogative powers dealing with foreign policy and foreign relations was reviewable by the court.

Duty to Consult

To evaluate whether HFN was owed a duty to consult on the facts, the Federal Court of Appeal, like the lower court, applied the test set out in the Rio Tinto case5:

Whether the Crown had knowledge, actual or constructive, of a potential aboriginal claim or right; Whether the Crown's conduct could, potentially or actually, adversely impact aboriginal rights; and Finally, whether there was a causal link between the Crown's conduct and the alleged adverse effects on an aboriginal claim or right. As held in the Federal Court below, the first two conditions were satisfied while the final criteria was the source of contention. In rejecting the HFN argument that it was owed a prior duty to be consulted, the Federal Court of...