Resource investments must consider Aboriginal rights

Canada’s constitution recognizes and affirms treaty rights and other rights of indigenous peoples. This creates a fiduciary duty on the part of the federal and provincial governments with respect to Aboriginal peoples. The nature of that duty, its application, and the larger question of Aboriginal title claims, have been subject to interpretation by Canadian courts for the past 40 years.

Recently, however, the Supreme Court of Canada (SCC) released two seminal decisions in this area, which can be expected to significantly impact resource development projects where Aboriginal interests may be affected. As a result, buyers of, and investors in, Canadian targets involved in resource development should pay increased attention to whether appropriate consultation and accommodation has occurred with local Aboriginal communities, and should tailor their due diligence review to ascertaining potential risks and liabilities associated with possible infringement on Aboriginal title.

The cases

Tsilhqot’in Nation v British Columbia marks the first time the SCC has upheld a specific Aboriginal title claim. In that case, the court confirmed that the Crown has a duty “to consult in good faith with any Aboriginal groups asserting title to the land about proposed uses of the land and, if appropriate, accommodate the interests of such claimant groups”. Where a title claim exists and its holder does not provide consent, the province could only justify an incursion on the title where there is a compelling and substantial public objective.

Torys LLP is an international business law firm that works with clients who expect the best advice and service. John Terry, Derek Flaman, Ian Arellano and Michael Pickersgill are partners at the firm.