BALDREY: Will First Nations court ruling lead to 'Investment chill'?

BALDREY: Will First Nations court ruling lead to ‘Investment chill’?

BRITISH COLUMBIA — Anyone who has been paying attention to the evolution of First Nations rights and powers in B.C. over the past 20 years or so should not be surprised by the recent Supreme Court of Canada decision that recognized a specific aboriginal title.

Nevertheless, given the dire warnings from some of the economic chaos that will result from the historic decision, there is reason to be concerned about its impact on B.C.’s economy.

The high court resolved what started out in 1983 as a dispute over a logging license but which evolved into a landmark case about the aboriginal title rights of a specific First Nations, in this instance the Tsilhqot’in Nation in the Chilcotin region of the Interior.

The concept of aboriginal title was first established by the Supreme Court of Canada more than 40 years ago, in the Calder vs. B.C. case. The recent decision represents the first time in history the high court has formally declared aboriginal title to exist in a specified area.

The decision potentially gives First Nations that establish title (not an easy task) a veto over activities on their land. Where title is established, the consent of the First Nation band in question must first be gained before those activities can proceed.

The high court did provide an escape clause of sorts for governments. If a government meets a three-pronged test, it can override the lack of First Nations consent.

The test is a potentially rigorous one: a government must fully show it has consulted and accommodated First Nations’ interests, the proposed action must be "compelling and substantial" for the good of the public (which includes First Nations), and that the government is consistent with its fiduciary obligations to First Nations.

But the court also referenced a previous decision (Delgamuukw) in citing specific activities that can potentially infringe on aboriginal title, and they include forestry, mining, infrastructure, environmental protection and "the general economic development of the interior of British Columbia."

So while the decision provides clarity and, eventually, certainty over issues pertaining to First Nations rights and powers, it didn’t vastly reshape the landscape on this matter.

An analysis by the Osler law firm’s aboriginal law group (entitled: The Sky is Not Falling) notes this: "Despite the

significant media attention that the recent Supreme Court of Canada decision has received, it represents a reiteration of established law regarding aboriginal title that has been developed over decades," it said.

Another prominent law firm, MacMillan LLP, had this to say: "With the exception of clarifying what is required to establish occupation, the decision does not make significant changes to the law of aboriginal title as it has come to exist over the last several decades."

In B.C., the reality on the ground for the past decade or so is that First Nations have had a de facto veto over many significant activities on land claimed as ancestral.

Increasingly, both the provincial government and private sector companies have realized this, and have had to ensure that First Nations support is secured – not ignored – before proceeding with a particular development. And, really, what is the problem with that? Not having First Nations support can frustrate or even block a particular development (hello there, Northern Gateway pipeline).

The court’s decision would seem to cement this reality along more defined lines.

However, while the B.C. government and many companies doing business here are aware of this, the trouble is that many outside interests are not, and they (i.e. potential capital investors) may well be thinking that the sky has indeed fallen, particularly if they pay more attention to media coverage than legal analyses.

This is where concerns about the impact on the provincial economy arise. It may well be that an investment chill may develop in this province, as potential investors nervously wonder whether it’s safe to invest in a project where the backing of the First Nations concerned is not secured, or not certain.

It seems likely that the investment world may be unsettled for a period of time, as many things flowing from this decision sort themselves out. There are outstanding questions: what happens to overlapping land claims when it comes to establishing title is an example of just one.

In the meantime, it may be wise and prudent for any natural resource developer to secure the support, if not the outright partnership, of First Nations before proceeding – which is often the case today anyway.

While there’s no doubt the Supreme Court decision is historic and significant, British Columbia has been moving in the decision’s direction for some time now. The sky is not falling folks, but it may have some storm clouds for a while.

Keith Baldrey is chief political reporter for Global BC.