Building Canada Act, the duty to consult and economic reconciliation

Canada is proposing to accelerate the approval process for major infrastructure projects under new legislation while promising to respect the rights of Indigenous peoples.

Accomplishing these expedited timelines will require a change to existing approaches to engaging with Indigenous communities. 

However, that does not mean the constitutional duty to consult is abrogated. Instead, the Government of Canada (Government), project proponents and Indigenous groups need to come to the table with a wider scope of negotiation principles if all Canadians are to benefit from projects in “the national interest.” 

This update provides an overview of the main legal factors relating to Indigenous peoples that remain operative even within the Building Canada Act’s streamlined approval framework. 

The framework of Indigenous rights in the Act

On June 26, the Building Canada Act came into force (the Act). The Act aims to streamline the regulatory approval process for infrastructure projects of national importance. Refer to our earlier update How the new Building Canada Act works for an overview. 

In brief, the Act empowers the federal cabinet to classify certain infrastructure projects as being in the national interest. The Act explicitly allows proponents to streamline the approval process for projects by deeming all federal requirements as pre-emptively “approved” and skipping the planning phase for projects that fall under the purview of the Impact Assessment Act (IAA).

However, beginning with its preamble, the Act also affirms that the Government is committed to working in partnership with Indigenous people and to respecting both:

• The rights of Indigenous people recognized and affirmed by section 35 of the Constitution Act, 1982 (“s. 35”).
• The rights set out in the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).¹

Respect for Indigenous rights in balance with the Act’s urgent economic development goals is reflected as well in section 4, the purpose provision.  

These foundational provisions, together with others in the body of the Act, make clear that fundamental factors of the Indigenous legal landscape – the duty to consult and issues of unresolved title and treaty rights – will be inextricably linked to any national interest project under the Act.

The operationalization of Indigenous rights 

As a constitutional duty, the honour of the Crown and the duty to consult cannot be abrogated by legislation. The duty to consult is rooted in section 35 of the Constitution Act, 1982, which recognizes and affirms the existing Aboriginal and treaty rights of Indigenous peoples and requires the Crown to act honourably in dealings with Indigenous peoples. While a project may be “approved,” that does not mean the duty to consult is automatically met. The projects contemplated in the Act involve Crown actions that may adversely affect Indigenous rights or title, whether proven or asserted. As such, the Crown must consult with affected Indigenous communities and, where appropriate, accommodate them. 

This is recognized in the Act with provisions regarding: the list of national interest projects  in the Act’s schedule (s. 5(7)), the issuance of documents (ss. 7(2)(c) and (2.1)), and amendments to conditions or documents (s. 8(3)); all of which explicitly require consultation with the Indigenous peoples whose rights may be adversely affected.

Pursuant to the streamlined federal review process under the Act, the Major Projects Office itself will be responsible for conducting direct consultation with Indigenous rightsholders affected by potential projects. Given current consultation practices within the Government, including the delegation of procedural aspects to project proponents, it is unclear how the Major Projects Office’s consultation will be faster than the existing federal regulatory processes. Not only is consultation not an easily accelerated process – especially when the environmental effects are potentially large and unknown – it is also complicated by the fact that it is not clear if conditions imposed by the Act with mitigation and/or accommodation will be available in every case.

Failure to adequately consult and accommodate can and has led to significant litigation on past major projects in Canada. While consent is not required for projects to proceed, without the necessary support from Indigenous communities project development may be delayed by court proceedings, and potential physical community intervention.

To date, Indigenous communities have raised several concerns with the Act, including the lack of consultation prior to tabling the Act, the Act’s ability to override existing laws, conflicts with UNDRIP and self-determination and a narrow definition of “national interest” that risks excluding Indigenous perspectives and priorities. Several legal challenges have already been filed with respect to the Act.²

Towards economic reconciliation

The only way to accomplish the Act’s central goal of advancing national interest projects through “an accelerated process that enhances regulatory certainty and investor confidence,” while still respecting this robust legal underpinning, is through greater and evolving engagement with Indigenous parties. 

In an attempt to address and alleviate some of the critiques of the Act, the federal government has created an Indigenous Advisory Council within the Major Projects Office and committed to doubling to $10 billion the Indigenous Loan Guarantee Program to help unlock capital for Indigenous communities to gain full equity ownership in major nation-building projects The First Nations Bank of Canada, which lends to Indigenous communities and peoples including for commercial projects says it is seeking to secure $50 million in equity capital over the coming year to strengthen its ability to serve Indigenous economic development.

The federal government has promised the Act will “contribute to greater prosperity for Indigenous communities, through equity and resource management.” This can be taken as a notice to industry to rethink Indigenous participation in proposed projects, emphasizing economic reconciliation (including equity involvement) over more traditional modes of engagement. 

In addition, the initial five projects listed under the Act are all near completion and/or under construction. Consultation has already or will shortly be found as sufficient. This does not address the status of consultation of other projects slated for potential listing. 

Takeaways

As the Government of Canada has stated: “By advancing national interest projects, the Government of Canada is committed to working in partnership with Indigenous Peoples to support economic prosperity, grounded in respect for constitutionally protected rights and modern treaty obligations.”

Realizing this promise will not be easy. The key for all participants may be to zero in on the extent to which a given project can advance the interests of Indigenous peoples through increased partnership, engagement, and relationship-building in the journey towards economic reconciliation: s. 5(6).

Our firm has assisted – and will continue to assist – industry proponents, government and Indigenous communities and businesses on shared economic objectives and taking steps towards achieving economic reconciliation.

The authors would like to thank Aimee Ferguson, summer student, for her contribution to preparing this legal update.