2013 FC 900, 2013 FC 900

T-153-13 2013 FC 900 Hupacasath First Nation ( Applicant ) v. The Minister of Foreign Affairs Canada and The Attorney General of Canada ( Respondents ) Indexed as: Hupacasath First Nation v. Canada (Foreign Affairs) Federal Court, Crampton C.J.—Vancouver, June 5, 6 and 7; Ottawa, August 26, 2013.

Aboriginal Peoples — Judicial review of pending ratification of Agreement Between the Government of Canada and the Government of the People’s Republic of China for the Promotion and Reciprocal Protection of Investments (CCFIPPA) — Applicant seeking declaration that Canada required to consult with, accommodate First Nations prior to ratifying CCFIPPA — Whether Canada having duty to consult with applicant prior to ratification of CCFIPPA — Whether duty to consult owed determined by test in Haida Nation v. British Columbia (Minister of Forests) — First, second elements of test satisfied, i.e.

Crown aware of rights advanced by applicant; contemplated Crown conduct ratification of CCFIPPA — As to third element, evidence not demonstrating that adverse impacts of CCFIPPA on applicant’s interests appreciable, non-speculative — No causal link between CCFIPPA, claimed adverse impacts — No potential for: CCFIPPA tribunal to find that measures protecting Aboriginal interests contravening expropriation provisions in CCFIPPA, Canada to refrain from implementing such measures — Not clear how uncertainty regarding scope of general, specific exemptions in CCFIPPA assisting applicant to establish that potential adverse effects on its Aboriginal rights appreciable, non- speculative — No evidence ratification of CCFIPPA giving rise to such non-speculative, appreciable risk — No evidence that Canada’s scope of action would be constrained, fettered or influenced — Applicant’s assertion speculative considering basic nature of minimum standard of treatment, expropriation obligations in CCFIPPA — Application dismissed.

Constitutional Law — Aboriginal and Treaty Rights — Duty to consult — Applicant seeking declaration that Canada required to consult with, accommodate First Nations prior to ratifying Agreement Between the Government of Canada and the Government of the People’s Republic of China for the Promotion and Reciprocal Protection of Investments (CCFIPPA) — Submitting CCFIPPA having adverse effects on Aboriginal rights, i.e. significant change in legal framework applicable to land, resource regulation, impact on scope of self- government — Whether Canada having duty to consult with applicant prior to ratifying CCFIPPA — Aboriginal interests relevant herein those protected by Constitution Act, 1982, s. 35(1) — Haida Nation v.

British Columbia (Minister of Forests) applied — Evidence not demonstrating that adverse impacts of CCFIPPA on applicant’s interests appreciable, non-speculative — Duty to consult applying solely to asserted Aboriginal rights — Not applying to contemplated conduct simply having potential adverse effects on applicant’s future negotiating position, other interests not specifically concerning its asserted Aboriginal rights.

This was an application for judicial review of the pending ratification of the Agreement Between the Government of Canada and the Government of the People’s Republic of China for the Promotion and Reciprocal Protection of Investments (CCFIPPA). The applicant sought a declaration that Canada is required to engage in a process of consultation and accommodation with First Nations, including the applicant, prior to ratifying or taking other steps that will bind Canada under the CCFIPPA.

The applicant submitted that the ratification of the CCFIPPA would give rise to two general categories of adverse effects on its Aboriginal rights: (1) the CCFIPPA will result in a significant change in the legal framework applicable to land and resource regulation in Canada; and (2) the rights granted to Chinese investors under the CCFIPPA will directly and adversely impact the scope of self-government that the applicant can achieve, either through the exercise of its Aboriginal rights, through the treaty-making process, or through the exercise of delegated authority from Canada or the Government of British Columbia.

At issue was whether, prior to ratifying the CCFIPPA, Canada had a duty to consult with the applicant. Held , the application should be dismissed. The Aboriginal interests that were relevant in the present case were those interests that are protected by subsection 35(1) of the Constitution Act, 1982 . The present case solely concerned whether the preconditions that must be met to trigger a duty to consult were met. It did not concern the content of that duty, if the duty existed in respect of the ratification of the CCFIPPA.

The question of whether the alleged duty to consult was owed to the applicant was determined by application of the test set forth in the Supreme Court of Canada decision Haida Nation v. British Columbia (Minister of Forests) . The three elements of the test are (1) the Crown’s knowledge, actual or constructive, of a potential Aboriginal claim or right; (2) contemplated Crown conduct; and (3) the potential that the contemplated conduct may adversely affect an Aboriginal claim or right.

The first and second elements of the test were satisfied, as the respondents confirmed that they were aware that the foregoing Aboriginal rights had been advanced by the applicant, both in treaty negotiations and in litigation, and it was determined that the contemplated Crown conduct in question was the ratification of the CCFIPPA. As to the third element of the test, the evidence adduced did not demonstrate that any adverse impacts that the CCFIPPA may have upon the applicant’s asserted Aboriginal interests would be appreciable and non-speculative.

On the contrary, the adverse impacts that the applicant identified were speculative, remote and non-appreciable. In addition, the applicant did not demonstrate the required causal link between the CCFIPPA and those claimed potential adverse impacts. There did not appear to be an appreciable and non-speculative potential for either (

i) an arbitral tribunal established under the CCFIPPA to find that measures designed to protect or accommodate the applicant’s asserted Aboriginal interests contravene the expropriation provisions in the CCFIPPA, or (ii) Canada to refrain from implementing such measures due to a fear of being found liable to pay significant damages to one or more Chinese investors. There was uncertainty regarding the scope of the general and specific exemptions in the CCFIPPA to ensure that the federal government

and sub-national governments retain policy flexibility in key areas. However, it remained far from clear how this uncertainty assisted the applicant to establish that the potential adverse effects on its asserted Aboriginal rights are appreciable and non-speculative.

In the absence of any evidence to demonstrate that there was a non-speculative and appreciable risk that an arbitral panel might not only make such a finding in respect of an identifiable permit, but also that such a finding would adversely impact upon the applicant’s asserted Aboriginal interests, the ratification of the CCFIPPA would not give rise to such a non-speculative and appreciable risk.

The applicant did not adduce any evidence to persuasively demonstrate that, as a result of the fact that Canada will take into account the risk of an adverse arbitral panel ruling, in developing measures to protect or accommodate the applicant’s asserted Aboriginal interests, there was an appreciable and non-speculative possibility that Canada’s scope of action would be constrained, fettered or influenced in a way that would leave the applicant worse off than if the CCFIPPA was not implemented.

In the absence of such evidence, and considering the very basic nature of the provisions in the CCFIPPA pertaining to minimum standard of treatment and expropriation obligations, as well as the fact that the general and specific exemptions of the CCFIPPA will afford policy flexibility to Canada, this assertion was found to be entirely speculative in nature. A distinction was made between potential adverse effects on asserted Aboriginal rights and potential adverse effects on a First Nation’s future negotiating position.

The duty to consult applies solely to the former, where they are demonstrated to be non-speculative, appreciable and causally linked to particular conduct contemplated by the Crown. Stated alternatively, that duty does not apply to contemplated conduct that may simply have potential adverse effects on the applicant’s future negotiating position. It also does not apply to other interests of the applicant that do not specifically concern its asserted Aboriginal rights.

Accordingly, to the extent that any of the potential adverse impacts identified by the applicant concern matters that may, as a result of the CCFIPPA, be more or less likely to be addressed in any future treaty that the applicant may negotiate with Canada, and that do not directly concern its asserted Aboriginal rights themselves, those potential impacts cannot give rise to a duty to consult. STATUTES AND REGULATIONS CITED Canadian Charter of Rights and Freedoms , being

Part I of the Constitution Act, 1982 ,

Schedule B, Canada Act 1982 , 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, No. 44]. Constitution Act, 1867 , 30 & 31 Vict., c. 3 (U.K.) (as am. by Canada Act 1982 , 1982, c. 11 (U.K.),

Schedule to the Constitution Act, 1982 , Item 1) [R.S.C., 1985, Appendix II, No. 5], art. 96. Constitution Act, 1982 ,

Schedule B, Canada Act 1982 , 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, No. 44], s. 35(1) ,(3). Indian Act , R.S.C., 1985, c. I-5, ss. 2(1) “band”, 81, 82, 83. Rules Amending the Federal Courts Rules (Expert Witnesses) , SOR/2010-176.

TREATIES AND OTHER INSTRUMENTS CITED Agreement Between the Government of Canada and the Government of the People’s Republic of China for the Promotion and Reciprocal Protection of Investments , done at Vladivostok on 9 September 2012, Arts. 2, 4, 5, 6, 7, 8, 9, 10, 32, 33, 35, Annex B.8, B.10, online: <http://www.in ternational.gc.ca/trade-agreements-accords-commerciaux/agr-acc/fipa-apie/china-text-chine.as px?lang=eng>. Agreement on Trade-Related Investment Measures , Annex 1A of the Marrakesh Agreement Establishing the World Trade Organization , concluded at Marrakesh, Morocco, 15 April 1994, 1868 U.N.T.S. 186.

K’ómoks Agreement-in-Principle , March 24, 2012, online: <http://www.bctreaty.net/nations/agree ments/Komoks_AIP_and_Appendices.pdf>. Land Claims and Self-Government Agreement among the Tlicho and the Government of the Northwest Territories and the Government of Canada , August 25, 2003, online: <http://www. aadnc-aandc.gc.ca/DAM/DAM-INTER-HQ/STAGING/texte-text/ccl_fagr_nwts_tliagr_tliagr_1302 089608774_eng.pdf>. Lheidli T’enneh Final Agreement , October 29, 2006, online: <http://www.bctreaty.net/ files_3/pdf_documents/lheidli_final_agreement.pdf>.

Maa-nulth First Nations Final Agreement , December 9, 2006, online: <http://www.maanulth.ca/ downloads/treaty/2010_maa-nulth_final_agreement_english.pdf>. North American Free Trade Agreement Between the Government of Canada, the Government of the United Mexican States and the Government of the United States of America , December 17, 1992, [1994] Can T.S. No. 2, Art. 1105,

Chapter 11. Tla’amin Final Agreement , online: <http://www.aadnc-aandc.gc.ca/DAM/DAM-INTER-HQ-LDC/ STAGING/texte-text/tla_1397237565325_eng.pdf>. Tsawwassen First Nation Final Agreement , December 6, 2007, online: <https://www.aadnc-aan dc.gc.ca/DAM/DAM-INTER-BC/STAGING/texte-text/tfnfa_1100100022707_eng.pdf>. United Nations Declaration on the Rights of Indigenous Peoples , 13 September 2007, G.A. Res. A/61/295. Westbank First Nation Self-Government Agreement , online: <http://www.aadnc-aandc.gc.ca/ DAM/DAM-INTER-HQ/STAGING/texte-text/wfn_1100100031767_eng.pdf>.

Yale First Nation Final Agreement, online: <http://www.aadnc-aandc.gc.ca/DAM/DAM-INTER-HQ-LDC/STAGING/texte-text/yfn_1336657047593_eng.pdf>. Yekooche First Nation Agreement-in-Principle, August 22, 2005, online: <http://www.bctreaty.net/nations/agreements/Yekooche%20AIP.pdf>. CASES CITED applied: Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73, [2004] 3 S.C.R. 511; Rio Tinto Alcan Inc. v. Carrier SekaniTribal Council, 2010 SCC 43, [2010] 2 S.C.R. 650; Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage), 2005 SCC69, [2005] 3 S.C.R. 388. distinguished: Hupacasath First Nation v.

British Columbia (Minister of Forests) et al., 2005 BCSC 1712, 51 B.C.L.R. (4th) 133; Gitxsan First Nationv. British Columbia (Minister of Forests), 2002 BCSC 1701, 10 B.C.L.R. (4th) 126; Huu-Ay-Aht First Nation et al. v. The Minister ofForests et al., 2005 BCSC 697, 33 Admin. L.R. (4th) 123; Dene Tha’ First Nation v. Canada (Minister of Environment), 2006 FC 1354,25 C.E.L.R. (3d) 247; Kwicksutaineuk Ah-Kwa-Mish First Nation v. Canada (Attorney General), 2012 FC 517, 45 Admin. L.R. (5th) 58;Squamish Nation et al. v.

Minister of Sustainable Resource Management et al., 2004 BCSC 1320, 34 B.C.L.R. (4th) 280. considered: Nlaka’pamux Nation Tribunal Council v. British Columbia (Environmental Assessment Office), 2011 BCCA 78, 306 B.C.A.C. 105;Hiawatha First Nation v. Ontario (Minister of the Environment), , 27 C.E.L.R. (3d) 197 (Ont. S.C.J.); R. v. Council ofCanadians, (Ont. S.C.J.), affd , 277 D.L.R. (4th) 527 (Ont. C.A.); Eli Lilly and Company v.Government of Canada, NAFTA ‒

Chapter 11 ‒ Investment, Notice of Intent, November 7, 2012; Glamis Gold Ltd. v. United States ofAmerica, NAFTA ‒

Chapter 11 ‒ Investment, Award, June 8, 2009; Mobil Investments Canada Inc. and Murphy Oil Corp. v.Government of Canada, NAFTA ‒

Chapter 11 ‒ Investment, Decision of Liability and on Principles of Quantum, May 22, 2012; Pope &Talbot Inc. v. Government of Canada, NAFTA ‒

Chapter 11 ‒ Investment, Award on Damages, May 31, 2002; Merrill & Ring ForestryL.P. v. Government of Canada, NAFTA ‒

Chapter 11 ‒ Investment, Final Award, March 31, 2010; Ahousaht First Nation v. Canada(Fisheries and Oceans), 2007 FC 567, [2007] 4 C.N.L.R. 1, affd 2008 FCA 212, 297 D.L.R. (4th) 722. referred to: R. v. Gladstone, (SCC), [1996] 2 S.C.R. 723, (1996), 137 D.L.R. (4th) 648; R. v. Van der Peet, (SCC), [1996] 2 S.C.R. 507, (1996), 137 D.L.R. (4th) 289; Quinn v. Bell Pole, 2013 BCSC 892; Black v. Canada (Prime Minister), , 54 O.R. (3d) 215 (C.A.); Canada (Prime Minister) v. Khadr, 2010 SCC 3, [2010] 1 S.C.R. 44; Chief Joe Hall v. Canada(Attorney General), 2007 BCCA 133, 281 D.L.R. (4th) 752; Dunsmuir v.

New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190; Alberta(Information and Privacy Commissioner) v. Alberta Teachers’ Association, 2011 SCC 61, [2011] 3 S.C.R. 654; Manitoba MetisFederation Inc. v. Canada (Attorney General), 2013 SCC 14, [2013] 1 S.C.R. 623; Dene Tha’ First Nation v. British Columbia (Ministerof Energy and Mines), 2013 BCSC 977, [2013] 11 W.W.R. 764; Phillips v. Nova Scotia (Commission of Inquiry into the Westray MineTragedy), (SCC), [1995] 2 S.C.R. 97, (1995), 141 N.S.R. (2d) 1; Metalclad Corporation v. United Mexican States(August 30, 2000), ICSID Case No. ARB (AF)/97/1; R. v.

Alfred, , [1994] 3 C.N.L.R. 88 (B.C.S.C.); S.D. Myers Inc. v.Government of Canada, NAFTA ‒

Chapter 11 ‒ Investment, Partial Award, November 13, 2000; Windstream Energy LLC v.Government of Canada, NAFTA ‒

Chapter 11 ‒ Investment, Notice of Intent, October 17, 2012; Lone Pine Resources Inc. v.Government of Canada, NAFTA ‒

Chapter 11 ‒ Investment, Notice of Intent, November 8, 2012; Técnicas MedioambientalesTECMED, S.A. v. United Mexican States (May 29, 2003), ICSID Case No. ARB (AF)/00/2; Occidental Exploration and ProductionCompany v. Republic of Ecuador (Final Award, July 1, 2004), LCIA Case No. UN3467; Toronto Area Transit Operating Authority v.Dell Holdings Ltd., (SCC), [1997] 1 S.C.R. 32, (1997) 31 O.R. (3d) 576; Tlicho v. Mackenzie Valley Impact ReviewBoard, 2011 NWTSC 31, [2012] 3 W.W.R. 97. AUTHORS CITED Aboriginal Affairs and Northern Development Canada.

Canada’s Statement of Support on the United Nations Declaration on the Rightsof Indigenous Peoples, online: <http://www.aadnc-aandc.gc.ca/eng/1309374239861/1309374546142>. Canada. House of Commons. Sessional Paper No. 8532-411-46, September 2012. Foreign Affairs, Trade and Development Canada. Final Environmental Assessment of the Canada-China Foreign Investment ProtectionAgreement (FIPA), online:<http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/china-chine/finalEA-china-chine-EEfinale.aspx?lang=en>. Foreign Affairs, Trade and Development Canada. Notes of

Interpretation of Certain

Chapter 11 Provisions (NAFTA Free TradeCommission, July 31, 2001), online:<http://www.international.gc.ca/trade-agreements-accords-commerciaux/topics-domaines/disp-diff/NAFTA-Interpr.aspx>. Framework Agreement to Negotiate a Treaty, July 27, 2007, online:<http://www.bctreaty.net/nations/agreements/Hup_frmwork.pdf>. Newcombe, Andrew and Lluis Paradell. Law and Practice of Investment Treaties: Standards of Treatment. Austin, Texas: Wolters

Kluwer, 2009. Ryan, Margaret Clare. “ Glamis Gold, Ltd. v. The United States and the Fair and Equitable Treatment Standard” (2011), 56:4 McGill L.J. 919. APPLICATION for judicial review of the pending ratification of the Agreement Between the Government of Canada and the Government of the People’s Republic of China for the Promotion and Reciprocal Protection of Investments . Application dismissed. APPEARANCES Mark Underhill and Catherine Boies Parker for applicant. Tim Timberg , Judith Hoffman , Mara Tessier , Shane Spelliscy and Pierre-Olivier Savoie for respondents.

SOLICITORS OF RECORD Underhill, Boies Parker , Vancouver, for applicant. Deputy Attorney General of Canada for respondents.

The following are the reasons for judgment and judgment rendered in English by [ 1 ] C rampton C.J.: This is an application for judicial review regarding the pending ratification of the Agreement Between the Government of Canada and the Government of the People’s Republic of China for the Promotion and Reciprocal Protection of Investments (CCFIPPA [or Agreement]). [ 2 ] The applicant, Hupacasath First Nation (HFN), seeks a declaration that Canada is required to engage in a process of consultation and accommodation with First Nations, including HFN, prior to ratifying or taking other steps that will bind Canada under the CCFIPPA. [ 3 ] For the reasons that follow, I have concluded that: (

i) The potential adverse impacts that HFN submits the CCFIPPA may have on its asserted Aboriginal rights, due to changes that the CCFIPPA may bring about to the legal framework applicable to land and resource regulation in Canada, are non-appreciable and speculative in nature.

I also find that HFN has not established the requisite causal link between those alleged potential adverse impacts and the CCFIPPA. (ii) The same is true with respect to the potential adverse impacts that HFN submits the CCFIPPA may have on the scope of self- government which it can achieve. (iii) Therefore, the ratification of the CCFIPPA by the Government of Canada (Canada) without engaging in consultations with HFN would not contravene the principle of the honour of the Crown or Canada’s duty to consult HFN before taking any action that may adversely impact upon its asserted Aboriginal rights. [ 4 ] This application will therefore be dismissed.

I. The CCFIPPA [ 5 ] The CCFIPPA was signed at Vladivostok, Russia, on September 9, 2012. [ 6 ] Pursuant to

Article 35, Canada and the Government of the People’s Republic of China (the “Contracting Parties”) are required to notify each other through diplomatic channels that they have completed the internal legal procedures for the entry into force of their agreement. The CCFIPPA will enter into force on the first day of the month following the month in which the second of the two notifications is received and shall remain in force for a period of at least 15 years. [ 7 ] After the expiration of the initial 15-year period, either party may terminate the CCFIPPA.

Such termination will be effective one year after its receipt by the other Contracting Party. However, the Agreement will continue to be effective for an additional 15-year period with respect to investments made prior to its termination. [ 8 ] It appears to be common ground between the parties to this proceeding (parties) that the substantive provisions in the CCFIPPA are highly similar to those in the North American Free Trade Agreement Between the Government of Canada, the Government of the United Mexican States and the Government of the United States , December 17, 1992, [1994] Can T.S.

No. 2 (entered into force January 1, 1994) (NAFTA) and closely resemble the provisions in Canada’s 2004 model Foreign Investment Promotion and Protection Agreement (2004 model FIPA).

Indeed, HFN acknowledged that the provisions in the CCFIPPA that were the focus of this proceeding “are the same as those set out in NAFTA” (reply of the applicant (reply), at paragraph 33). [ 9 ] According to the Explanatory Memorandum on the CCFIPPA [Canada, House of Commons, Sessional Paper No. 8532-411-46, September 2012] (Explanatory Memorandum), the CCFIPPA: … is a bilateral treaty designed to protect and promote investment between Canada and the People’s Republic of China (the “Parties”) by assigning legally binding rights and obligations to both Parties in foreign investment matters.

The Agreement provides Canadian investors operating in the People’s Republic of China with additional legal protection, setting out the manner in which Canadian investors should be treated and procedures through which they may pursue alleged breaches of the Agreement. Key provisions include: national treatment, most-favoured nation treatment, minimum standard of treatment, protection against expropriation, obligations for the free transfer of funds and an investor-State dispute settlement mechanism.

[ 10 ] The CCFIPPA provides the same protections described above to investors of the People’s Republic of China (China). [ 11 ] The Explanatory Memorandum also notes that “[c]onsultations on the [CCFIPPA] took place under the ongoing consultation process by the Department of Foreign Affairs and International Trade with stakeholders.” [ 12 ] It is common ground between the parties that such consultations did not include the HFN or other First Nations, notwithstanding that Canada released an initial environmental assessment of the CCFIPPA for public comment in February 2008. [ 13 ] Shortly following the announcement of the signing of the CCFIPPA, HFN wrote to Prime Minister Harper to request that the ratification of the agreement be postponed “until there has been full and proper consultation between the Crown and the founding First Nations, including [HFN]”.

Representatives of other First Nations have made similar requests. To date, HFN’s request has not been granted. It appears that the same is true with respect to the requests that have been made on behalf of other First Nations. [ 14 ] No legislative amendments are required to implement the CCFIPPA. [ 15 ] The CCFIPPA is similar in many respects to 24 other foreign investment protection agreements (FIPAs) that Canada has entered into since 1989, particularly those entered into since 1995 (affidavit of Vernon MacKay (MacKay affidavit), respondents’ record, Vol. I, Tab 1, at paragraphs 20–31 and 39–44). II.

The HFN [ 16 ] The HFN, formerly known as the Opetchesaht Indian Band, is a “band” within the meaning of that term as defined in the Indian Act , R.S.C., 1985, c. I-5 ( Indian Act ) [ subsection 2(1) ]. The Hupacasath Chief and Council represent approximately 285 band members, all of whom are Indians as defined in the Indian Act. [ 17 ] According to an affidavit sworn by Carolyne Sayers (Sayers affidavit), a Council member of the HFN, the HFN’s band members live on two reserves near Port Alberni on Vancouver Island.

It appears that those reserves are located on the banks of the Alberni Inlet, and are approximately 53.4 and 2.6 hectares, respectively, in size. The HFN has three additional reserves in that territory which are not occupied, due to the lack of infrastructure. In total, the HFN asserts Aboriginal rights and title with respect to approximately 232 000 hectares of land in central Vancouver Island, as reflected on the map set forth in Appendix 1 to these reasons. [ 18 ] In her affidavit, which was authorized by, and sworn on behalf of, the HFN’s Chief and Council, Ms.

Sayers stated that she is concerned that if the CCFIPPA is ratified and implemented the HFN will be negatively affected in a number of ways, including: a. HFN may be prevented from exercising its rights to conserve, manage and protect lands, resources and habitats in accordance with traditional Hupacasath laws, customs and practices, and in the best interests of its members; b.

HFN may be prevented from negotiating a treaty which protects its rights to exercise its authority in the best interests of the Hupacasath people, including to conserve, manage and protect lands, resources and habitats and to engage in other governance activities, in accordance with traditional Hupacasath law, customs and practices, and in the best interests of its members; c. disputes over resource use between HFN and companies with Chinese investors will be resolved by the application of international trade and investment law, which Ms.

Sayers believes does not provide the same protections for Aboriginal rights and title as Canadian constitutional law; d. because measures aimed at protecting HFN’s rights and title may give rise to significant damage claims, the federal and provincial governments will be less likely to take steps to protect those rights, including engaging in adequate consultation and reasonable accommodation; and e. the rights of Chinese investors, and the impact of any potential claim under the CCFIPPA on Canada may be taken into account by the government and courts in determining whether a specific measure HFN seeks to protect its rights and title would constitute reasonable accommodation.

III. Issue [ 19 ] In its application, HFN sought: a. A declaration that Canada is required to engage in a process of consultation and accommodation with First Nations, including HFN, prior to taking steps that will bind Canada under the CCFIPPA; b. An order restraining the Minister of Foreign Affairs or any other official or representative of Canada from sending a letter to the People’s Republic of China (China) stating that Canada has completed the internal legal procedures for the entry into force of the CCPIFFA, until the appropriate consultation and accommodation has been carried out; and c.

An interlocutory injunction restraining the Minister of Foreign Affairs or any other official or representative of Canada from sending a letter to China stating that Canada has completed the internal legal procedures for the entry into force of the CCFIPPA, until this application has been heard and determined by the Court. [ 20 ] In their written submissions, the respondents stated that if this Court finds that a duty to consult with HFN has been triggered and breached, it would not be necessary for the Court to go beyond making a declaration that a such a duty is owed to HFN, “as it can be assumed that the government will comply with the law as stated by the courts”. [ 21 ] Based on that statement, HFN withdrew its request for the relief described in subparagraphs 19(

b) and (

c) above. [ 22 ] The respondents also submitted that any declaration that this Court may issue should be confined to addressing the asserted duty

to consult with HFN, and should not address whether a duty to consult is owed to other First Nations. I agree. [23] As the respondents noted, HFN did not commence a class action or bring a representative action on behalf of other First Nations.It also did not serve notice on all First Nations so that they could be added as parties.

No other First Nations sought to be added as a partyto this proceeding. [24] In these circumstances, I agree that it would not be appropriate for this Court to address, in any declaration that may be made inthis proceeding, the issue of whether a duty to consult is owed to other First Nations, even if the formidable practical impediments toworkable and meaningful consultations with the over 600 First Nations bands that exist across the country could be overcome. Myconclusion in this regard is reinforced by the fact that Aboriginal rights are both band- and fact-specific (R. v.

Gladstone, (SCC), [1996] 2 S.C.R. 723, at paragraph 65 and R. v. Van der Peet, (SCC), [1996] 2 S.C.R. 507, at paragraph 69);and representatives of Aboriginal groups need to be authorized to speak or to bring claims on behalf of their groups (Quinn v. Bell Pole,2013 BCSC 892, at paragraph 17).

Moreover, with one exception, no evidence has been led on behalf of other First Nations regarding thepotential impact of the CCFIPPA on their Aboriginal interests. [25] In its initial written submissions, HFN raised a threshold issue of whether the act of ratifying the CCFIPPA is something thatcould be subject to judicial review. HFN maintains that ratification of the CCFIPPA is subject to review on the basis that Canada’sfailure to consult HFN prior to ratification is a breach of its constitutional duty to consult with HFN in respect of a measure that mayaffect HFN’s Aboriginal rights.

That said, during the hearing, HFN underscored that it was not suggesting that the Court can revieweither Canada’s prerogative to enter into the CCFIPPA or the content of the CCFIPPA. HFN acknowledges that these are matters of“high policy” that are not amenable to judicial review (Black v. Canada (Prime Minister), , 54 O.R. (3d) 215 (C.A.), atparagraph 52). The respondents have not contested this threshold issue. Indeed, it is clear that the exercise of the prerogative power ofthe Crown can be reviewed for constitutionality (Canada (Prime Minister) v.

Khadr, 2010 SCC 3, [2010] 1 S.C.R. 44, at paragraphs 36‒37; Black, above, at paragraph 50). [26] Accordingly, the only issue to be determined in this application is whether, prior to ratifying the CCFIPPA in accordance withArticle 33 of the CCFIPPA, Canada has a duty to consult with HFN. IV. Standard of Review [27] The ratification of the CCFIPPA is an exercise of a prerogative power. It is common ground between the parties that the exerciseof this power is subject to review on constitutional grounds.

In this proceeding, HFN submits that Canada’s failure to consult with HFNprior to ratifying the CCFIPPA would constitute a breach of Canada’s constitutional obligation to engage in consultations with HFNbefore taking any action which may adversely affect HFN. It also asserts that such action would be contrary to Canada’s constitutionalobligation to act honourably in all its dealings with Aboriginal peoples (Chief Joe Hall v. Canada (Attorney General), 2007 BCCA 133,281 D.L.R. (4th) 752, at paragraphs 47‒49; Nlaka’pamux Nation Tribunal Council v.

British Columbia (Environmental AssessmentOffice), 2011 BCCA 78, 306 B.C.A.C. 105, at paragraph 68). [28] Given the constitutional nature of this issue, it is subject to review on a standard of correctness (Dunsmuir v. New Brunswick,2008 SCC 9, [2008] 1 S.C.R. 190, at paragraph 58; Alberta (Information and Privacy Commissioner) v. Alberta Teachers’ Association2011 SCC 61, [2011] 3 S.C.R. 654, at paragraph 30). V. Preliminary Issues [29] In their written submissions, the respondents requested the Court to strike four affidavits sworn on behalf of the applicant byindividuals who are not members of HFN.

In the alternative, the respondents requested that portions of those affidavits be struck. Therespondents maintain that those affidavits or portions thereof, are clearly irrelevant. [30] The affidavits in question were sworn by Grand Chief Stewart Phillip, Chief James Ahnassay, Chief Bryce Williams and ChiefIsadore Day. [31] The first three of those affidavits focus primarily upon consultations that were requested in respect of the CCFIPPA, and theaffiants’ concerns regarding the potential implications of the CCFIPPA on (

i) their bands’ Aboriginal interests, treaty rights and ability toprotect the environment in their territories or (ii) First Nations more generally. Grand Chief Phillip’s affidavit also briefly discusses thehistory behind the establishment of the Union of British Columbia Indian Chiefs and that organization’s principal objectives. [32] Chief Day’s affidavit, written on behalf of the Serpent River First Nation and the Chiefs of Ontario organization (COO), alsofocuses upon the potential implications of the CCFIPPA on First Nations’ treaty and other rights.

In addition, it provides an overview ofthe history of relations between First Nations and the Crown and a more detailed treatment of the concerns of First Nations than isprovided in the other three affidavits mentioned immediately above. [33] Notwithstanding that Grand Chief Phillip, Chief Ahnassay, Chief Williams and Chief Day are not authorized to represent HFN,and have focused on the potential impact of the CCFIPPA on their respective First Nations groups, or on First Nations in general, I havedecided to exercise my discretion in favour of allowing their affidavits to remain on the Court record.

My decision in this regard is basedon my conclusion that those affidavits may potentially assist my understanding of the potential impact of the CCFIPPA on HFN. In thecase of Chief Day’s affidavit, I consider the history that he provides to be helpful in assisting me to understand the important context inwhich the Crown’s legal duty to consult First Nations arose, particularly as that duty relates to the honour of the Crown and the objectiveof reconciliation. VI. Experts A. Mr. Gus Van Harten [34] HFN’s expert evidence was provided by Mr. Gus Van Harten, in a letter dated February 13, 2013 (Van Harten opinion) to

HFN’s counsel. [35] Mr. Van Harten is an associate professor at Osgoode Hall Law School, at York University. He obtained his PhD in 2006 and hassince published a number of articles, primarily on investment treaty arbitration. He has also written a book on that topic. [36] Mr. Van Harten was retained to provide his expert opinion with respect to various aspects of the CCFIPPA.

These include theobligations that it imposes upon Canada, the manner in which it differs from other international treaties to which Canada is a party, howit will apply to federal and provincial government action and legislation, how it will apply to domestic judicial decisions which affectland and resources subject to Aboriginal or treaty rights claims, whether principles of domestic law will be taken into account byinternational arbitrators who are appointed to adjudicate under the CCFIPPA, and whether measures or actions taken by First Nations’governments could potentially put Canada out of compliance with the CCFIPPA. [37] The respondents submitted that Mr.

Van Harten’s evidence should be accorded reduced weight because he has been a vocal criticof the type of investor state arbitration provisions that are included in the CCFIPPA and because he has frequently and publicly voicedhis opposition to ratification of the CCFIPPA. [38] Given that HFN acknowledged and did not dispute these allegations, I am inclined to agree with the respondents’ position,primarily on the basis that Mr.

Van Harten’s ability “to assist the Court impartially,” as required by the Court’s Code of Conduct forExpert Witnesses, SOR/2010-176 [Rules Amending the Federal Courts Rules (Expert Witnesses)], would appear to be somewhatcompromised. B. Mr. J. Christopher Thomas, Q.C. [39] The respondents’ expert evidence was provided by Mr. Chris Thomas, Q.C. in a letter dated March 13, 2013 (Thomas opinion)to counsel to the respondents. [40] Mr. Thomas is a senior principal research fellow at the National University of Singapore’s Center for International Law.

He hasalso practiced in the field of international economic law for over 25 years, taught at two Canadian universities, and worked for thefederal Minister for International Trade during the launch of the Uruguay Round of multilateral trade negotiations and the Canada-United States Free Trade Agreement negotiations. In addition, he acted for the Government of Mexico in relation to the negotiation ofthe NAFTA and two related agreements on labour and environmental co-operation. He has also practised as an international trade disputepanellist and an international arbitrator. [41] Mr.

Thomas was retained to provide his views on the Van Harten opinion, including its criticism of international investor-statearbitration; the extent to which the CCFIPPA differs from Canada’s past agreements on investment protection; the extent to which theCCFIPPA may prevent a government from determining an appropriate level of environmental protection, from managing its internationalresources, or from making changes to its laws; the interaction between the CCFIPPA and Canadian domestic law; remedies that may begranted by an arbitral panel constituted under the CCFIPPA; the extent to which Canada can be held internationally responsible under theCCFIPPA for legislative or judicial decisions with respect to HFN; and the scope of the Aboriginal affairs’ exception in the CCFIPPA.

C. General Observations [42] Given Mr. Van Harten’s acknowledged partiality, and given that I generally found Mr. Thomas to be more neutral, factuallyrigorous and persuasive, I generally accepted his evidence over Mr. Van Harten’s when they did not agree. In any event, I found that Mr.Van Harten’s evidence did not materially assist HFN to demonstrate that the potential impact of the CCFIPPA on its Aboriginal interestsis appreciable and non-speculative, as required to trigger a duty to consult. To a large extent, this was due to the fact that his assertions onkey issues were baldly stated and unsubstantiated. VII.

Analysis A. Duty to Consult—General Principles [43] The Government of Canada’s duty to consult with Aboriginal peoples, including HFN, and to accommodate their interests incertain circumstances is grounded in the honour of the Crown (Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73,[2004] 3 S.C.R. 511 (Haida), at paragraphs 16 and 20).

In brief, “In all its dealings with Aboriginal peoples, from the assertion ofsovereignty to the resolution of claims and the implementation of treaties, the Crown must act honourably.” This is necessary to achievethe important goal of “‘the reconciliation of the pre-existence of aboriginal societies with the sovereignty of the Crown’”. In turn, toachieve that goal, the principle of the honour of the Crown must be viewed generously (Haida, above, at paragraph 17). Likewise, theduty to consult must be approached in a “generous” and “purposive” manner (Rio Tinto Alcan Inc. v.

Carrier Sekani Tribal Council,2010 SCC 43, [2010] 2 S.C.R. 650 (Rio Tinto), at paragraph 43). [44] The honour of the Crown gives rise to different duties in different circumstances. Where, as in the present circumstances withHFN, a treaty with a particular Aboriginal group remains to be concluded, the honour of the Crown implies a duty to consult when theconditions described below are met.

Moreover, when those conditions are met, the honour of the Crown further requires that theAboriginal group’s relevant interests be reasonably accommodated, if appropriate (Haida, above, at paragraphs 18, 20, 27 and 33). [45] The Aboriginal interests that are relevant for this purpose are those interests that are protected by subsection 35(1) of theConstitution Act, 1982 [Schedule B, Canada Act 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, No. 44] (the Constitution)], whichrecognizes and affirms “[t]he existing aboriginal and treaty rights of the aboriginal peoples of Canada” (Hiawatha First Nation v.Ontario (Minister of the Environment), , 27 C.E.L.R. (3d) 197 (Ont.

S.C.J.), at paragraph 50). For greater certainty,subsection 35(3) clarifies that, for this purpose, “treaty rights” includes “rights that now exist by way of land claims agreements or maybe so acquired.” [46] Given the constitutional dimension of the honour of the Crown, the duty to consult is a “constitutional imperative” (Nlaka’pamux

Nation Tribal Council v. British Columbia (Environmental Assessment Office) , 2011 BCCA 78 [cited above], at paragraph 68 ). It seeks to provide protection to Aboriginal and treaty rights while furthering the goals of reconciliation between Aboriginal peoples and the Crown ( Rio Tinto , above, at paragraph 34; Manitoba Metis Federation Inc. v. Canada (Attorney General) , 2013 SCC 14 , [2013] 1 S.C.R. 623, at paragraph 66 ). [ 47 ] Once triggered, the content of the duty to consult and accommodate varies with the circumstances. The jurisprudence in this area continues to evolve.

However, in general terms “the scope of the duty is proportionate to a preliminary assessment of the strength of the case supporting the existence of the right or title, and to the seriousness of the potentially adverse effect upon the right or title claimed” ( Haida , above, at paragraph 39). [ 48 ] The present case solely concerns whether the preconditions that must be met to trigger a duty to consult were met.

It does not concern the content of that duty, if the duty exists in respect of the ratification of the CCFIPPA. [ 49 ] In Haida , above, at paragraph 35, the Supreme Court stated that the duty to consult “arises when the Crown has knowledge, real or constructive, of the potential existence of the Aboriginal right or title and contemplates conduct that might adversely affect it”. [ 50 ] In Rio Tinto , above, at paragraph 31, the Court elaborated on this test as follows: This test can be broken down into three elements: (1) the Crown’s knowledge, actual or constructive, of a potential Aboriginal claim or right; (2) contemplated Crown conduct; and (3) the potential that the contemplated conduct may adversely affect an Aboriginal claim or right. [ 51 ] I will address each of these three elements of the test separately below.

Although HFN also briefly stated in its application that Canada’s duty to consult also arises from the Crown’s fiduciary obligations towards First Nations Peoples and the United Nations Declaration on the Rights of Indigenous Peoples , G.A. Resolution A/61/295, 13 September 2007, I agree with the respondents that the question of whether the alleged duty to consult is owed to HFN must be determined solely by application of the test set forth immediately above.

I would add in passing that HFN did not pursue these assertions in either written or oral argument, and that, in a press release issued by Aboriginal Affairs and Northern Development Canada, entitled Canada’s Statement of Support on the United Nations Declaration on the Rights of Indigenous Peoples, that Declaration is described as “an aspirational document” and as “a non-legally binding document that does not reflect customary international law nor change Canadian laws”. HFN did not make submissions or lead evidence to the contrary. B.

The Crown’s Knowledge of HFN’s Claims or Rights [ 52 ] It is common ground between the parties that this element of the test is satisfied. [ 53 ] In her affidavit, Ms. Sayers characterized HFN’s asserted Aboriginal rights as including the following: a. The right to harvest, manage, protect and use fish, wildlife, and other resources in HFN’s traditional territory in priority to all other users, subject only to conservation; b. Rights to the commercial sale of fish, wildlife and other resources to earn a livelihood; c.

The right to have access to exclusive and preferred areas to harvest or use fish, wildlife and other resources in their traditional territory; d. The right to protect the habitats that sustain fish, wildlife and other resources which the Hupacasath have a right to harvest; e. The right to harvest, use and conserve fish, wildlife and other resources and to protect and manage the habitat of fish, wildlife and other resources in accordance with traditional Hupacasath laws, customs, and practices both in their traditional and their modern form; and f.

The right to build, maintain and occupy structures incidental to harvesting, using, managing or conserving fish, wildlife and other resources in HFN’s territory. [ 54 ] The respondents confirmed that they are aware that the foregoing Aboriginal rights have been advanced by HFN, both in treaty negotiations and in litigation. As is immediately apparent, those rights essentially relate to the use, management and conservation of land and resources within HFN’s claimed territory. The respondents acknowledge that those rights are rooted in

section 35 of the Constitution. It is those rights, and those rights alone, that are relevant for the analysis below. C. The Contemplated Crown Conduct [ 55 ] It is common ground between the parties that the contemplated Crown conduct in question is the ratification of the CCFIPPA. D.

The Potential That The Contemplated Conduct May Adversely Affect HFN’s Asserted Aboriginal Rights [ 56 ] In assessing whether this third element of the duty to consult test is met, it is critical to determine “the degree to which the conduct contemplated by the Crown would adversely affect” the asserted Aboriginal rights ( Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage) , 2005 SCC 69 , [2005] 3 S.C.R. 388 ( Mikisew ), at paragraph 34 ). While a generous and purposive approach to this element is required, “[m]ere speculative impacts” will not suffice.

There must be “an ‘appreciable adverse effect on the First Nations’ ability to exercise their aboriginal right’” ( Rio Tinto , above, at paragraph 46). Moreover, the claimant “must show a causal relationship between the proposed government conduct or decision and a potential for adverse impacts on pending Aboriginal claims or rights” ( Rio Tinto , above, at paragraph 45). [ 57 ] In this regard, adverse impacts extend to any effect that may prejudice a pending Aboriginal claim or right. This includes high-

level management decisions or structural changes to the management of a resource that may adversely affect Aboriginal claims or rights,even if such decisions have no immediate impact on the resource or the land upon which it is situated (Rio Tinto, above, at paragraph47), and even if later opportunities for consultations exist in respect of specific actions that may be taken pursuant to such high leveldecisions or structural changes (Dene Tha’ First Nation v.

British Columbia (Minister of Energy and Mines), 2013 BCSC 977, [2013] 11W.W.R. 764, at paragraph 114). [58] HFN submits that the ratification of the CCFIPPA is such a high-level management decision or structural change and has a non-speculative potential to adversely affect its asserted Aboriginal rights in an appreciable way, even if it will have no immediate impact onits lands or the resources situated thereon.

In this regard, HFN adds that Canada’s agreement to be bound by the CCFIPPA “may set thestage for further decisions that will have a direct adverse impact on land and resources” [emphasis in original], (Rio Tinto, above, atparagraph 47) by granting Chinese investors enforceable rights which must be taken into account when any level of government inCanada makes any kind of resource management decision. [59] For the reasons set forth below, I respectfully disagree.

In my view, the evidence adduced during this proceeding does notdemonstrate that any adverse impacts that the CCFIPPA may have upon HFN’s asserted Aboriginal interests will be appreciable andnon-speculative. On the contrary, I am satisfied that the adverse impacts which HFN has identified are speculative, remote and non-appreciable. In addition, HFN has not demonstrated the required causal link between the CCFIPPA and those claimed potential adverseimpacts. [60] HFN submitted that the ratification of the CCFIPPA is likely to give rise to the following two general categories of adverseeffects: a.

The CCFIPPA will result in a significant change in the legal framework applicable to land and resource regulation in Canada, andthat various potential adverse effects on its Aboriginal rights will flow from that change; b.

The rights granted to Chinese investors under the CCFIPPA will directly and adversely impact the scope of self-government whichHFN can achieve, either through the exercise of its Aboriginal rights, through the treaty-making process, or through the exercise ofdelegated authority from Canada or the Government of British Columbia. [61] I will address these two broad categories of claimed adverse effects separately below. However, I will first address a thresholdissue raised by the respondents. (

i) Can it be said that the CCFIPPA cannot, as a matter of law, trigger a duty to consult? [62] The respondents submit that the ratification of the CCFIPPA cannot, as a matter of law, trigger a duty to consult with HFN. Thisposition is based primarily on its assertions that (

i) the ratification of the CCFIPPA will not alter Canadian domestic law or requireexisting laws or regulations to be changed, and (ii) the authority of arbitral tribunals established under the CCFIPPA will not extend intothe domestic sphere. In this latter regard, the respondents note that the remedial powers of such tribunals will be restricted by theCCFIPPA to awarding monetary damages or restitution of property, solely against Canada and China.

As a result, in the event a measurepassed by HFN were found by an arbitral tribunal to be in breach of Canada’s obligations under the CCFIPPA, the tribunal would haveno power to enjoin the measure and it would be Canada, not HFN, that would be responsible for paying damages or providing restitution.Put differently, any awards issued by arbitral panels under the CCFIPPA will have no binding effect upon HFN. [63] In support of their position, the respondents rely upon R. v. Council of Canadians, (Ont. S.C.J.) (Council ofCanadians – OSCJ); affd , 277 D.L.R. (4th) 527 (Ont. C.A.) (Council of Canadians – ONCA).

There, the OntarioCourt of Appeal upheld a finding of first instance that the fact that the arbitral tribunals set up under

Chapter 11 of the NAFTA have notbeen incorporated into Canada’s domestic law negated one possible basis for applying

section 96 of the Constitution [Constitution Act,1867, 30 & 31 Vict., c. 3 (U.K.) (as am. by Canada Act 1982, 1982, c. 11 (U.K.),

Schedule to the Constitution Act, 1982, Item 1)[R.S.C., 1985, Appendix II, No. 5]] to those tribunals (Council of Canadians – ONCA, above, at paragraph 25). However, the Court thendeclined to address the broader question of whether a tribunal established pursuant to an international treaty is per se exempt fromsection 96, because it was satisfied that the NAFTA tribunals do not violate

section 96. [64]

Section 96 of the Constitution [1867] states: 96. The Governor General shall appoint the Judges of the Superior, District, and County Courts in each Province, except those of theCourts of Probate in Nova Scotia and New Brunswick. [65] In the course of its reasons, the Court of Appeal observed that although this provision is “framed as an appointing poweraccorded to the federal government, it is now well established that s. 96 was designed to ensure the independence of the judiciary and toprovide some uniformity to the judicial system throughout the country” (Council of Canadians – ONCA, above, at paragraph 31). [66] In reaching the conclusion that

Chapter 11 of the NAFTA had not been incorporated into Canada’s domestic law, theapplications Judge observed that international law, which governs NAFTA tribunals, and domestic law, operate in different spheres(Council of Canadians – OSCJ, above, at paragraph 41). She then proceeded to conclude that the establishment of tribunals underNAFTA cannot breach the Canadian Charter of Rights and Freedoms, being

Part I of the Constitution Act, 1982,

Schedule B, CanadaAct 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, No. 44] (Charter), because (

i) those tribunals have no authority to changeCanada’s domestic laws or practices, (ii) their jurisdiction is limited to the international law issues before them and the remedies are alsocircumscribed, (iii) nothing in the NAFTA compels Canada to amend its laws and practices, and (iv) the arbitration of claims thatCanada has failed to honour its treaty obligations does not affect or determine the rights of Canadians (Council of Canadians – OSCJ,above, at paragraph 65). [67] The respondents rely on the foregoing reasoning to assert that the CCFIPPA cannot, as a matter of law, trigger the constitutionalduty to consult.

[68] In my view, the fact that the arbitration provisions in the NAFTA, or similar provisions in other FIPAs, may not attract

section 96of the Constitution [Constitution Act, 1867] or breach the Charter does not preclude the possibility that the ratification of suchagreements may trigger the application of the constitutional principle of the honour of the Crown and a duty to consult with First Nationsprior to such ratification. One reason why this is so is that the duty to consult is triggered where there is simply a non-speculativepossibility of appreciable impacts on asserted Aboriginal rights, whereas Charter rights are only triggered when there is a more seriousrisk that the alleged violation will occur (Phillips v.

Nova Scotia (Commission of Inquiry into the Westray Mine Tragedy), (SCC), [1995] 2 S.C.R. 97, at paragraph 108; Council of Canadians – OSCJ, above, at paragraph 62). Absent other legalconsiderations that have not been addressed in this proceeding, the question may need to be determined on the basis of the facts andevidence in each case, namely, whether they establish the three elements required to trigger the duty to consult.

In any event, given theconclusions that I have reached below regarding the facts and evidence in this case, it is not necessary to make a definitive determinationon the respondents’ position that the CCFIPPA cannot, as a matter of law, trigger the duty to consult. [69] However, I will note in passing that the respondents’ position on this point is inconsistent with provisions that are included in anumber of final agreements that Canada has entered into with First Nations, which require it to consult with those First Nations prior toconsenting to be bound by a new international treaty which would give rise to new international legal obligations that may adverselyaffect a right of the First Nations. (See for example Maa-nulth First Nations Final Agreement, December 9, 2006, at 1.7.1; LheidliT’enneh Final Agreement, October 29, 2006, at paragraph 11[in

Chapter 2]; Tla’amin Final Agreement, at paragraph 24 [in

Chapter 2];Yale First Nation Final Agreement, at 2.8.1; and Tsawwassen First Nation Final Agreement, December 6, 2007, clauses 30 and 31 inChapter 2; see also Land Claims and Self-Government Agreement among the Tlicho and the Government of the Northwest Territoriesand the Government of Canada, August 25, 2003, at 7.13.2). (ii) Effects flowing from a change in the legal framework applicable to land and resource regulation [70] HFN submits that the ratification of the CCFIPPA triggers the duty to consult because it grants Chinese investors new,substantive, and enforceable rights with respect to any investments they may hold, or maintain, in areas over which HFN assertsAboriginal or treaty rights.

HFN maintains that this constitutes a significant change in the legal landscape pertaining to its lands andresources because, among other things, those rights necessarily involve a restriction of the options open to the Crown to address HFN’sasserted Aboriginal and treaty claims, and to protect the resources which are the subject of those claims. [71] It is common ground between the parties that there does not appear to have been a previous case in which the courts in Canadahave been called upon to assess whether a duty to consult exists in respect of any other investment treaty or similar internationalagreement. a.

Duty to consult jurisprudence relied upon by HFN [72] In support of its assertion that ratification of the CCFIPPA would constitute a high-level management decision or structuralchange that has an appreciable and non-speculative potential to adversely affect its asserted Aboriginal rights, HFN relies on a line ofcases in which a duty to consult was found to exist in respect of conduct that was found to meet this test. [73] I agree with the respondents that those cases are all distinguishable on the basis that the high-level decisions or structuralchanges in each of those cases all directly related to land or resources in respect of which Aboriginal peoples have asserted or establishedAboriginal rights.

By contrast, the CCFIPPA is a broad, national framework investment treaty that does not directly relate to anyparticular lands or resources. Rather than being directly or even broadly related to land or resources, it is designed to protect and promoteinvestment between Canada and China by ensuring basic legally binding rights and obligations to investors of both Contracting Parties. [74] In Hupacasath First Nation v.

British Columbia (Minister of Forests) et al., 2005 BCSC 1712, 51 B.C.L.R. (4th) 133(Hupacasath), the Crown conduct which gave rise to the duty to consult was the removal of certain lands from a tree farm license (TFL)within claimed HFN territory. It was determined that the removal of those lands from the TFL had the potential to result in a lower levelof possible government intervention in the activities on the land than existed under the TFL regime. Justice Lynn Smith elaborated asfollows at paragraph 223: There is a reduced level of forestry management and a lesser degree of environmental over-sight.

Access to the land by the Hupacasathbecomes, in practical terms, less secure because of the withdrawal of the Crown from the picture. There will possibly be increasedpressure on the resources on the Crown land in the TFL as a result of the withdrawal of the Removed Lands.

The lands may now bedeveloped and re-sold. [75] Justice Smith added, among other things, that by agreeing to the removal of the lands in question from the TFL, “the Crowndecided to relinquish control over the activities on the land, control that permitted a degree of protection of potential aboriginal rightsover and above that which flows from the continued application of federal and provincial legislation” (Hupacasath, above, at paragraph225).

As further explained in the reasons below, no similar relinquishment of control or non-speculative attenuation of the Crown’sability to protect HFN’s asserted Aboriginal rights will occur as a result of the ratification of the CCFIPPA. [76] In Gitxsan First Nation v. British Columbia (Minister of Forests), 2002 BCSC 1701, 10 B.C.L.R. (4th) 126, Justice Tysoe foundthat the Minister of Forests’ consent to a change in corporate control of a company which held a TFL gave rise to a duty to consult.

Inreaching that conclusion, Justice Tysoe found that the change in the controlling mind of the company, as well as the fact that the effect ofthe change in control was to protect the company from bankruptcy, gave rise to a non-speculative potential for an adverse effect on theFirst Nation applicant’s Aboriginal rights and title. This was in part due to the fact that the philosophy of the persons making thedecisions associated with the licenses may have changed.

In addition, any sale by a trustee in bankruptcy (in the absence of such achange in control) would have required the Minister’s consent, and he would have been required to consult with the applicants beforegiving such consent. Once again, ratification of the CCFIPPA has no similar non-speculative potential to adversely impact upon any ofthe lands or resources over which HFN has asserted Aboriginal rights. [77] Likewise, the Crown conduct at issue in the other duty to consult cases relied upon by HFN also directly concerned the applicantFirst Nations’ claimed lands or specific resources on those lands.

For example:

• In Huu-Ay-Aht First Nation et al. v. The Minister of Forests et al. , 2005 BCSC 697 , 33 Admin. L.R. (4th) 123, the Crown conduct was a forest and range revitalization policy which, among other things, took back 20 percent of the annual allowable cut from major replaceable forest licences and tree farm licences throughout the province, and allocated back to First Nations some of what was taken, based upon a formula that was rejected by the applicants.

The Crown unsuccessfully argued that a duty to consult did not arise until a future point in time at which decisions to grant or renew specific licences on specific parcels of land occurred. • In Dene Tha’ First Nation v. Canada (Minister of Environment) , 2006 FC 1354 , 25 C.E.L.R. (3d) 247, the Crown conduct at issue was the design of an oversight mechanism, or blueprint, for the construction of the Mackenzie Gas Pipeline (MGP), from which all ensuing environmental and review processes would flow.

That mechanism, or Cooperation Plan, conferred no rights, but established the means by which future activities in relation to the MGP, which ran through the applicant’s territory, would be managed. • In Kwicksutaineuk Ah-Kwa-Mish First Nation v. Canada (Attorney General) , 2012 FC 517 , 45 Admin. L.R. (5th) 58, the Crown conduct at issue was the reissuance of finfish aquaculture licences in the applicant’s territories by the federal government following the assumption of this jurisdiction from the provincial government.

The applicant sought consultation because it was concerned that the licences authorizing aquaculture at particular farm sites posed significant risks to the health of nearby wild fisheries, upon which the exercise of their Aboriginal fishing rights depended. • In Squamish Nation et al. v. Minister of Sustainable Resource Management et al. , 2004 BCSC 1320 , 34 B.C.L.R. (4th) 280 ( Squamish ), the Crown conduct at issue was a decision to allow a change in the control and expansion of a proposed ski and golf resort, on lands over which the applicant claimed Aboriginal rights and title.

In the course of finding that a duty to consult existed, the Court characterized the practical implications of the decision to allow a change in control as having been “dramatic” ( Squamish , above, at paragraph 78). [ 78 ] The foregoing cases all involved Crown conduct which directly concerned the applicant First Nation’s claimed territories or the resources situated upon those territories. They are all distinguishable from the ratification of the CCFIPPA, because the CCFIPPA does not address any specific lands, potential projects involving specific lands, or specific resources.

It is simply a broad, national, framework agreement that provides additional legal protections to Chinese investors in Canada, and Canadian investors in China, which parallel the rights provided in several existing investment protection and trade agreements to which Canada is already a party. b. Potential adverse effects identified by HFN [ 79 ] Nevertheless, it remains important to consider each of the principal adverse impacts on its Aboriginal rights that HFN alleges may result from the ratification of the CCFIPPA.

For the reasons set forth below, I have concluded that each of those claimed impacts are speculative and non-appreciable.

In the absence of more specific asserted interests that may be adversely impacted and more specific measures that may be found to contravene the CCFIPPA, it is also difficult to ascertain the required causal link between the CCFIPPA and a potential adverse impact on HFN’s asserted Aboriginal interests. [ 80 ] It is common ground between the parties that the jurisprudence on what is or is not a speculative or non-appreciable impact is not well developed. [ 81 ] HFN’s principal concern appears to be the possibility that the rights conferred upon Chinese investors under the CCFIPPA may be used to challenge or discourage measures which would have the effect of preserving lands and resources that are the subject of its asserted Aboriginal claims.

Stated differently, HFN submits that the CCFIPPA may oblige or lead Canada to refrain from taking certain types of measures which would otherwise have been open to it to address conflicts that may develop between Chinese investors and HFN, for example, if HFN takes action to protect its lands and resources for the future. [ 82 ] With respect to the potential “chilling effect” of the CCFIPPA on the government, HFN asserts that even the spectre of potentially substantial awards that may be issued by arbitral panels in favour of Chinese investors may well factor into Canada’s analysis of whether to proceed with a proposed measure to protect HFN’s asserted Aboriginal rights.

In this regard, HFN placed significant weight on evidence provided by Mr. MacKay, Acting Director, Investment Trade Policy Division, Department of Foreign Affairs and International Trade (DFAIT). In cross-examination, Mr.

MacKay confirmed that, when developing regulatory or other policy initiatives, including measures that may be taken to accommodate Aboriginal peoples, the responsible government department is strongly advised to consult with the government’s Trade Law Bureau to ensure that the obligations or measures in question are consistent with Canada’s international trade and investment obligations (cross-examination on affidavit of Vernon John MacKay, April 3, 2013 (MacKay cross), applicant’s record, Volume II, at pages 482, 483 and 537). [ 83 ] Given the foregoing, HFN further maintains that ratification of the CCFIPPA will significantly change the equation for the balancing exercise that the Crown is required to conduct where accommodation is required in making decisions that may adversely affect HFN’s asserted Aboriginal interests.

As a result, HFN states that those interests will be less likely to receive the protection which is currently required in order to maintain the honour of the Crown.

For example, if HFN’s preferred form of accommodation would expose Canada to significant potential liability to one or more Chinese investors, this may be a factor in Canada’s determination of whether such a measure is reasonable. [ 84 ] In support of its positions, HFN relied primarily upon the experience to date under the NAFTA, the international experience with agreements providing for investor-state arbitration, and the ongoing uncertainty regarding how arbitral panels are likely to assess claims under the CCFIPPA.

However, HFN also encouraged the Court to look beyond the experience to date under NAFTA and other international trade and investment agreements, because that experience has been limited and continues to evolve. HFN also dismissed Canada’s experience under the approximately 24 bilateral investment protection treaties that are currently in force, on the basis that, in most cases, the other party to the treaty has little investment in Canada.

In contrast, HFN noted that Chinese investment in Canada increased from approximately $228 million in 2003 to over $12 billion in 2009, prior to the acquisition earlier this year of Nexen Inc. by CNOOC Ltd., a Chinese state-owned oil company, in a transaction valued at approximately $15 billion. HFN attaches further significance to the fact that much of the investment in Canada by Chinese entities to date has been by enterprises having links to the Chinese government, which HFN contends has been reported to have a strong, centralized interest in securing natural resources in Canada

and elsewhere. [85] With respect to the NAFTA, HFN notes that it is the only other international trade or investment agreement with investor-statearbitration provisions, under which Canada hosts a significant level of foreign investment. HFN observes that most of the obligations inthe CCFIPPA are the same as those set out in the NAFTA, and that as a result of its experience under the NAFTA, Canada ranks sixth ona list of 90 countries published by the United Nations Conference on Trade and Development in 2012, in terms of claims made byforeign investors against governments.

HFN further observes that whereas the NAFTA can be terminated at any time by any of its threesignatories with one year’s notice, the CCFIPPA has a minimum period of 15 years and its protection for investments existing at the endof that period will extend for a further 15 years. [86] With respect to legal uncertainty, HFN makes two general points. First, it notes that the arbitrators who will be appointed toadjudicated claims brought under the CCFIPPA are not judges and are not provided with the hallmarks of judicial independence, such assecurity of tenure and financial security. It notes that Mr.

Van Harten provided evidence, which does not appear to be disputed, thatmany arbitrators work as counsel while also working as arbitrators. Second, it notes that there is a significant level of uncertaintyregarding how important provisions in the CCFIPPA will be applied. This will be discussed further below.

In general, it states thatarbitrators’ decisions under the CCFIPPA will be subject to judicial review on a very limited basis, and that to date, judicial reviews ofdecisions by tribunals constituted under the NAFTA have been dismissed in their entirety, with one exception (Metalclad Corporation v.United Mexican States (August 30, 2000), ICSID Case No. ARB (AF)/97/1), where a portion of the award was set aside. [87] HFN acknowledges that arbitral awards under the CCFIPPA can only be made against, and bind, the parties to the CCFIPPA,i.e., China and Canada, pursuant to

Article 32 of the CCFIPPA. Specifically, it acknowledges that an arbitral panel would have no powerto invalidate a measure that may be adopted by HFN or Canada to protect HFN’s asserted interests. It also acknowledges the possibilitythat the parties to the CCFIPPA may choose to simply pay damage awards and maintain regulations or other measures that have beenfound to contravene the CCFIPPA.

However, based on terms that are contained in various final agreements that the Government ofCanada has entered into with First Nations, it asserts that it is likely that HFN will be required to remedy any measures that it mayimplement (assuming that it eventually enters into a Final Agreement containing similar terms), if those measures are found tocontravene the CCFIPPA.

HFN maintains that Canada is not likely to maintain any such measures in the face of such a finding. [88] In addition to the foregoing general submissions, HFN makes various specific submissions with respect to articles 4 and 10 of theCCFIPPA, which deal with the minimum standard of treatment to be accorded to Chinese investors, and expropriation, respectively.

Itappears to be common ground between the parties that, based on past experience internationally, if any challenges are brought byChinese investors under the CCFIPPA, they are more likely to be based on one or both of these two provisions than on other provisions.HFN adds that these are the two provisions that have been most likely to lead to significant awards under other investment treaties. [89] HFN also made submissions with respect to the scope of certain of the exceptions in the CCFIPPA, including (

i) measures thatCanada has reserved the right to adopt pursuant to Annex B.8, which includes measures denying Chinese investors any rights orpreferences provided to Aboriginal peoples, and (ii) environmental measures. [90] The parties’ submissions with respect to the provisions in the CCFIPPA pertaining to minimum standard of treatment (MST),expropriation and exceptions are discussed separately below. [91] However, before addressing those submissions, I pause to note that, in the absence of a modern treaty, it appears to be commonground between the parties that the HFN’s existing law-making powers are limited to the authority provided under sections 81 and 83 ofthe Indian Act, above.

Section 81 authorizes band councils to make by-laws that are not inconsistent with that legislation or anyregulation made by the Governor in Council or the Minister, regarding various purposes, including health, traffic, zoning and land useplanning, construction and maintenance of buildings and infrastructure, the protection of wildlife and gaming.

Section 83 provides theauthority for band councils to make by-laws, subject to the Minister’s approval, pertaining to matters such as local taxation, the licensingof businesses, the appointment of local officials, the payment of local officials and the raising of money from band members to supportband projects. HFN laws passed pursuant to sections 81 and 83 apply only on HFN reserves (R. v. Alfred, , [1994] 3C.N.L.R. 88 (B.C.S.C.), at paragraph 18). [92] HFN also has a Land Use Plan that Ms.

Sayers acknowledged is consultative in nature (cross-examination on affidavit ofCarolyne Brenda Sayers (Sayers cross), respondent’s record, Volume III, at pages 919‒921). An important component of that plan isHFN’s Cedar Access Strategy, which, like the Land Use Plan, HFN seeks to implement with the consent and cooperation of third parties(Sayers cross, at page 922). It appears to be common ground between the parties that, as consultation documents (rather than legalinstruments), the Land Use Plan and the Cedar Access Strategy are not instruments that fall within the potential scope of the CCFIPPA. 1.

Minimum standard of treatment [93] The provisions with respect to MST are set forth in

Article 4 of the CCFIPPA. Pursuant to paragraph 1 of

Article 4, theContracting Parties are required to “accord to covered investments fair and equitable treatment and full protection and security, inaccordance with international law.” Pursuant to paragraph 2 of

Article 4, “[t]he concepts of ‘fair and equitable treatment’ and ‘fullprotection and security’” do not require treatment in addition to or beyond that which is required by the international MST of aliens, asevidenced by general state practices accepted as law. It is common ground between the parties that this latter provision, which is virtuallyidentical to the language in the Notes of

Interpretation issued by the NAFTA Free Trade Commission in 2001 [Notes of

Interpretation ofCertain

Chapter 11 Provisions (NAFTA Free Trade Commission, July 31, 2001)] (2001

Interpretation Note) regarding the MSTprovisions in

Article 1105 of the NAFTA (Thomas opinion, at paragraph 102), contemplates the minimum standard of treatment requiredby customary international law. [94] Apparently relying largely upon decisions that pre-date the 2001

Interpretation Note, HFN asserts that “fair and equitabletreatment” includes a wide range of procedural and substantive protections, including a requirement for states to satisfy legitimateexpectations of foreign investors and to maintain a stable legal or regulatory framework for foreign investors. It adds that this standardwould not allow Canada to defend a challenge based on an argument that the measure in question was required to fulfill Canada’s

constitutional responsibilities under

section 35 of the Constitution. Citing the recent Notice of Intent filed by Eli Lilly and Company, HFN states that it would even be open to a Chinese investor to challenge judicial doctrines developed to give effect to

section 35, on the ground that those doctrines give rise to an unstable regulatory framework for investment. In its Notice of Intent, Eli Lilly challenges the “promise of the patent” doctrine developed in this Court, and in the Federal Court of Appeal ( Eli Lilly and Company v. Government of Canada , NAFTA –

Chapter 11 – Investment, Notice of Intent, November 7, 2012). [ 95 ] By contrast, the respondents took the position that the MST obligation simply provides for a very low procedural “baseline” below which the treatment of Chinese investors may not fall. This position was supported by Mr. Thomas, whose evidence on this point I accept. In this regard, he observed that the MST obligation in

Article 4 “is considered to be a basic standard of treatment that all members of the international community are capable of meeting” (Thomas opinion, at paragraph 119). Citing the recent arbitral panel ruling in Glamis Gold Ltd. v. United States of America , NAFTA –

Chapter 11 – Investment, Award, June 8, 2009 ( Glamis Gold ), at paragraph 627, the respondents described this standard as: … sufficiently egregious and shocking—a gross denial of justice, manifest arbitrariness, blatant unfairness, a complete lack of due process, evident discrimination, or a manifest lack of reasons—so as to fall below accepted international standards …. [ 96 ] Based on Mobil Investments Canada Inc. and Murphy Oil Corporation v. Government of Canada , NAFTA –

Chapter 11 – Investment, Decision on Liability and on Principles of Quantum, May 22, 2012 ( Mobil ), at paragraph 153, the respondents maintain that this standard does not prohibit regulatory changes even if they have a negative effect on an investor. In that case, an arbitral panel stated:

Article 1105 [of the NAFTA] may protect an investor from changes that give rise to an unstable legal and business environment, but only if those changes may be characterized as arbitrary or grossly unfair or discriminatory, or otherwise inconsistent with the customary international law standard. In a complex international and domestic environment, there is nothing in

Article 1105 to prevent a public authority from changing the regulatory environment to take account of new policies and needs, even if some of those changes may have far-reaching consequences and effects, and even if they impose significant additional burdens on an investor. [ 97 ] According to Mr. Thomas, whose evidence I once again accept, the fact that a regulatory measure may adversely affect an investment, increase the investor’s cost of doing business, or result in reduced profitability does not, in and of itself, constitute indirect expropriation (Thomas opinion, at paragraphs 32 and 131). [ 98 ] In support of its position that Chinese investors may rely on the MST provisions in

Article 4 to challenge measures that may be adopted to protect or accommodate HFN’s asserted interests, and to seek substantial damages claims, HFN refers to several claims or notices of intent to file claims which have been made against Canada under NAFTA (e.g., S.D. Myers Inc. v. Government of Canada , NAFTA –

Chapter 11 – Investment, Partial Award, November 13, 2000 ( S.D. Myers ); Windstream Energy LLC v. Government of Canada , NAFTA –

Chapter 11 – Investment, Notice of Intent, October 17, 2012; Lone Pine Resources Inc. v. Government of Canada , NAFTA –

Chapter 11 – Investment, Notice of Intent, November 8, 2012; Pope & Talbot Inc. v. Government of Canada , NAFTA –

Chapter 11 – Investment, Award on Damages, May 31, 2002 ( Pope & Talbot ) as well as claims that have been made against other countries (e.g., Técnicas Medioambientales TECMED, S.A. v. United Mexican States (May 29, 2003), ICSID Case No. ARB (AF)/00/2; Occidental Exploration and Production Company v. Republic of Ecuador (Final Award, July 1, 2004), LCIA Case No. UN 3467). [ 99 ] HFN acknowledges that the above-mentioned 2001

Interpretation Note was issued in response to the expansive

interpretation given to that provision in prior decisions, particularly Pope & Talbot , above. HFN also acknowledges that the

interpretation of the MST obligation in NAFTA has been incorporated into the language o

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