NUNATSIAVUT GOVERNMENT Applicant v. ATTORNEY GENERAL OF CANADA, 2015 FC 492

Date: 20150417 Docket: T-1347-13 Citation: 2015 FC 492 Ottawa, Ontario, April 17, 2015 PRESENT: The Honourable Madam Justice Strickland BETWEEN: NUNATSIAVUT GOVERNMENT Applicant and ATTORNEY GENERAL OF CANADA (DEPARTMENT OF FISHERIES AND OCEANS) Respondent and HER MAJESTY IN RIGHT OF NEWFOUNDLAND AND LABRADOR AS REPRESENTED BY THE MINISTER OF THE DEPARTMENT OF ENVIRONMENT AND CONSERVATION Second Respondent and NALCOR ENERGY Third Respondent I. The Project 4 II.

Factual Background . 5 Phase 1: Initial Engagement and Consultation on the Draft JRP Agreement, the Appointment of the JRP Members and the EIS Guidelines . 12 Phase 2: JRP Process Leading to Hearings . 15 Phase 3: Hearings and Preparation of the JRP Report 18 Phase 4: Consultation on the JRP Report 20 Phase 5: Regulatory Permitting . 29 III. Issues . 42 Issue 1: What is the Standard of Review? . 43 Applicant’s Position . 43 Canada’s Position . 44 Nalcor’s Position . 44 Analysis .. 45 Issue 2: What was the Content of the Duty to Consult and Accommodate, More Specifically: 57 A. .........

Does the Agreement Exhaustively Define the Crown’s Duty to Consult? 57 Applicant’s Submissions . 57 Canada’s Submissions . 58 Nalcor’s Submissions . 58 Analysis . 59

B. .......... What was the Scope and Extent of the Duty to Consult and Accommodate in this Case? 66 Applicant’s Position . 66 Canada’s Position . 68 Nalcor’s Position . 69 Analysis . 71 (

i) The Agreement 71 (ii) Scope of Duty to Consult at Common Law .. 76 Issue 3: Was the Applicant Adequately Consulted and Accommodated? . 90 A. ......... Preliminary Issues . 90 (

i) Collateral Attack . 90 ( ii) Delegation of Authority . 96 B. .......... Was the Applicant Adequately Consulted and Accommodated? . 99 Applicant’s Position . 99 Canada’s Position . 101 Nalcor’s Position . 105 Analysis . 109 (

a) Discrete Consultation Issues . 109 i. Adequacy of Consultation in Phases 1-3 . 109 ii. Aboriginal Consultation Report 111 iii.

Section 11.6.2 Procedure . 115 iv. May 1, 2008 Letter 117 v. Failure to Identify the Applicant in Canada’s Response . 118 (

b) Adequacy of Consultation prior to Issuance of Authorization . 118 (

c) Accommodation . 124 vi. High Level Management Structure . 127 vii. Comprehensive Downstream Assessment 128 viii. Framework Language for Compensation . 143 ix. Full Clearing . 143 IV. Conclusion . 149 JUDGMENT AND REASONS [ 1 ] This is an application for judicial review pursuant to ss 18 and 18.1 of the Federal Courts Act , RSC 1985, c-7 (“ Federal Courts Act ”), by which the Applicant challenges the decision of the Minister of Fisheries and Oceans to issue Authorization No. 13-01- 005 (“Authorization”) to Nalcor Energy (“Nalcor”). The Authorization was issued on July 9, 2013 and, pursuant to ss 32(2)(

c) and 35(2) (

b) of the Fisheries Act , RSC 1985, c F-14 (“ Fisheries Act ”), it permits impacts to fish and fish habitat arising from the construction of the Muskrat Falls hydroelectric generation facility proposed by Nalcor for the lower Churchill River as part of the Lower Churchill Hydroelectric Generation Project in Labrador. [ 2 ] The Applicant claims that it was not properly consulted and that concerns of Labrador Inuit were not fully and fairly considered or adequately accommodated by Canada, as represented by the Department of Fisheries and Oceans (“DFO”), in the decision to issue the Authorization. I.

The Project [ 3 ] Nalcor proposed to develop two hydroelectric generation facilities on the lower Churchill River in central Labrador with a

combined capacity of 3,047 megawatts (“MW”). The project would consist of two dams located at Muskrat Falls (824 MW) and at Gull Island (2,250 MW), two reservoirs, and transmission lines connecting Muskrat Falls, Gull Island and the existing Churchill Falls hydroelectric facility.

Additional facilities would include access roads, temporary bridges, construction camps, borrow pits and quarry sites, diversion facilities and spoil areas (“Project”) (as described in the Report of the Joint Review Panel: Lower Churchill Hydroelectric Generation Project dated August 2011(“JRP Report”)). [ 4 ] Given the nature of the Applicant’s claim, it is necessary to set out, in some detail, the factual background of this matter, its legislative backdrop and the relevant provisions of the Labrador Inuit Land Claims Agreement , between The Inuit of Labrador, Her Majesty The Queen in Right of Newfoundland and Labrador, and Her Majesty The Queen in Right of Canada, 22 January 2005 (“Agreement”), which was given force of law pursuant to the Labrador Inuit Land Claims Agreement Act , SNL 2004, c L-3.1 and the Labrador Inuit Land Claims Agreement Act , SC 2005, c 27.

II. Factual Background [ 5 ] On November 30, 2006 Nalcor submitted a project registration and description document for the Project with the Newfoundland and Labrador Department of Environment and Conservation (“NL DEC”) and the Canadian Environmental Assessment Agency (“Agency”), to initiate the provincial and federal environmental assessment processes pursuant to the Newfoundland and Labrador Environmental Protection Act , SNL 2002, c E-14.2 (“ NL EPA ”) and the Canadian Environmental Assessment Act , SC 1992, c 37 (“ CEAA ”).

The Agency was responsible for coordinating federal Aboriginal consultation during the environmental assessment of the Project, and for acting as the Crown Consultation Coordinator as described in the Consultation Framework described below. [ 6 ] Transport Canada (“TC”) and DFO determined that an environmental assessment was required because, to proceed, the Project would require approval pursuant to s 5(1) of the Navigable Waters Protection Act , RSC 1985, c N-22 (“ NWPA ”) as it involved dam construction, and an authorization pursuant to s 35(2) of the Fisheries Act as it would likely result in the harmful alteration, disruption or destruction of fish habitat, thereby triggering s 5(1)(

d) of the CEAA . TC and DFO each identified themselves as a “responsible authority” (“RA”) as defined in the CEAA , being a federal authority that is required to ensure that an environmental assessment (“EA”) is conducted ( CEAA , ss 2(1), 11(1)).

Health Canada identified itself as being in possession of specialist or expert information or knowledge necessary to conduct the EA, as did Environment Canada (“EC”), Natural Resources Canada (“NRC”), and Aboriginal Affairs and Northern Development Canada (then Indian and Northern Affairs Canada). [ 7 ] In response to a December 4, 2006 opinion request from NL DEC, DFO advised Newfoundland and Labrador (the “Province”) on January 12, 2007 that, amongst other things: an Environmental Impact Statement (“EIS”) was recommended in order to address the potential impacts on fish and fish habitat; the potential for bioaccumulation of mercury should be assessed in all fish species; a discussion of potential downstream effects should be provided; Nalcor should consider and discuss methods to reduce the release of mercury into the reservoir, thereby reducing mercury uptake and accumulation; and, the effects of changes to fish and fish habitat downstream of Muskrat Falls and/or Lake Melville should be discussed. [ 8 ] On February 9, 2007 a Notice of Commencement of an Environmental Assessment for the Project was posted on the Agency Registry, which initiated an EA of the Project under the CEAA .

Because DFO was of the opinion that the Project was likely to cause significant adverse environmental impacts, the federal Minister of Environment ultimately determined that a joint Canada-Newfoundland and Labrador EA, to be conducted by an independent review panel pursuant to ss 25(

a) and 29 of the CEAA , being the most stringent of the EA review options under that legislative regime, was appropriate. [ 9 ] Prior to making that determination, the Minister of Environment, as represented by the Minister of Lands and Natural Resources, wrote to the Applicant on May 30, 2007, advising of his intent to refer the proposed Project to a joint Canada-Newfoundland and Labrador review panel, referred to as the Joint Review Panel (“JRP” or “Panel”) for the EA and advising that the Agency had been asked to contact the Applicant to discuss the next steps in the process. [ 10 ] On August 8, 2007 DFO and TC wrote to the Applicant concerning the Project and, as required by s 11.2.8 of the Agreement, provided the Project registration document.

The letter explained that DFO had determined that the proposed damming and formation of the reservoirs would likely cause a harmful alteration, disruption or destruction of fish habitat and, therefore, that authorizations under the Fisheries Act would be required. Further, that TC had determined that the NWPA approvals would likely be required because a dam was a named work under

Part I of the NWPA , those regulatory requirements being triggers for an EA pursuant to s 5(1)(

d) of the CEAA . The letter also advised that DFO and TC were arranging consultations with Aboriginal groups to hear and understand their views about how they might be affected by the granting of the authorizations and approvals to construct and operate the Project, and invited participation. [ 11 ] Prior to this, DFO had met with representatives of the Applicant and other Aboriginal groups in Goose Bay, Labrador on October 19 and 20, 2006 to discuss DFO’s role with respect to the EA and to identify their early positions and perspectives about the Project.

At that time the Applicant had noted, amongst other things, that it should be consulted as, while the Project was not on Labrador Inuit Lands (“LIL”) or in the Labrador Inuit Settlement Area (“LISA”), which terms are defined in the Agreement, it could affect the zone where the Applicant has harvesting rights pursuant to ss 12.13.10 and 12.13.13 and

Schedule 12-E of the Agreement. The Applicant further noted that consultation should be in accordance with the Agreement. [ 12 ] In March 2007 the Province provided DFO with draft Environmental Impact Statement Guidelines (“EIS Guidelines”) for comment.

The preface of the draft EIS Guidelines stated that they were intended to assist the proponent with the preparation of the EIS, the purpose of which was to identify the important environmental impacts associated with the undertaking, to identify appropriate mitigation and produce a statement of residual effects for evaluation by the Minister of Environment and Conservation.

With respect to the EIS to be prepared by Nalcor, the EIS Guidelines stated that, “The contents of the EIS will be used by the Minister of Environment and Conservation, in consultation with Cabinet, to determine the acceptability of the proposed project based on anticipated impacts, proposed mitigation, and severity of unmitigable residual impacts from the proposed undertaking” . DFO reviewed the draft and made comments including that the study area boundary should include areas downstream of Muskrat Falls (Upper Lake Melville) where

biological effects may be expected to occur. [ 13 ] DFO and the Agency met with the Applicant in Goose Bay on September 18, 2007 at which time the need for input by the Applicant into the EIS was noted and a copy of the draft EIS Guidelines was provided. The draft EIS Guidelines were made available to the public for review on December 19, 2007. More than fifty interested parties responded.

The Applicant provided comments on February 22, 2008, referencing the potential application of consultation provisions as found in the Agreement and seeking, amongst other things, an expanded study area for the EIS. [ 14 ] On June 6, 2008 the Assistant Deputy Minister for the NL DEC responded to the Applicant’s comments on the draft EIS Guidelines, noting that they had been reviewed by both governments and that the Province was responding with the consent of the Agency.

It noted that the draft EIS Guidelines had been significantly modified to include consideration of the interests and knowledge of Aboriginal groups and communities, the Applicant in particular. Further, that s 7.0, Consultation with Aboriginal Groups and Communities, had been completely revised and that a list of the Aboriginal groups and communities to be consulted by Nalcor when preparing the EIS, including the Applicant, was now included.

A table responding to the Applicant’s comments, on a point by point basis, was attached to the letter, which also stated that should further explanation be required, the Applicant, upon request, would be provided with a meeting with both governments in an effort to resolve any outstanding concerns with the draft EIS Guidelines. Absent such a request, the Province and Canada would proceed to finalize the EIS Guidelines. [ 15 ] The finalized EIS Guidelines were issued by Canada and the Province in July 2008.

Ultimately, the EIS Guidelines did not stipulate specific geographic boundaries for the EIS, but required Nalcor to provide rationale for delineating the study area boundaries as it did (EIS Guidelines, s 4.4.2).

They also required that in its EIS, Nalcor assess whether the Project may reasonably be expected to have adverse environmental effects on the LISA (EIS Guidelines, s 4.2.5). [ 16 ] The EIS Guidelines described the EA as a process for identifying a Project’s potential interactions with the environment, predicting environmental effects, identifying mitigation measures and evaluating the significance of residual environmental effects.

The document also stated that if the Project proceeded, the EA process would provide the basis for setting out the requirements for monitoring and reporting to verify compliance with the terms and conditions of approval and the accuracy and effectiveness of predictions and mitigation measures (EIS Guidelines, s 2.1). Aboriginal and public participation, aboriginal traditional and community knowledge, the precautionary principle (EIS, Guidelines, ss 2.2, 2.3 and 2.5) and other matters were identified as basic principles of an EA.

Regarding consultation with Aboriginal groups, the EIS Guidelines stated: 4.8 Consultation with Aboriginal Groups and Communities The EIS shall demonstrate the Proponent’s understanding of the interests, values, concerns, contemporary and historic activities, Aboriginal traditional knowledge and important issues facing Aboriginal groups, and indicate how these will be considered in planning and carrying out the Project. To assist in ensuring that the EIS provides the necessary information to address issues of potential concern to these groups, the Proponent shall consult with each group for the purpose of: (

a) Familiarizing the group with the Project and its potential environmental effects; (

b) Identifying any issues of concern regarding potential environmental effects of the Project; and (

c) Identifying what actions the Proponent is proposing to take to address each issue identified, as appropriate. [ 17 ] Prior to this, in February 2008 the Government of Canada had released the Aboriginal Consultation and Accommodation: Interim Guidelines for Federal Officials to Fulfill the Legal Duty to Consult (“ Interim Consultation Guidelines ”). The evidence of DFO was that these Interim Consultation Guidelines established that consultation by Canada with Aboriginal groups was to be conducted by way of a “whole of government approach” and should be integrated with the EA process to the extent possible.

Further, that to the best of DFO’s ability, the Project consultations were conducted with reference to the Interim Consultation Guidelines throughout the Project until the issuance of the Aboriginal Consultation and Accommodation: Updated Guidelines for Federal Officials to Fulfill the Duty to Consult in March 2011 (Affidavit of Ray Finn, Regional Director of Ecosystems Management, Newfoundland and Labrador Region, DFO dated 22 October 2013 (“Finn Affidavit”), paras 35-36). [ 18 ] On May 1, 2008 the Province wrote to the Applicant, with the consent of the Agency, advising that both levels of government wished to work with the Applicant to ensure that their respective obligations under the Agreement were met.

In that regard, they had reviewed the Agreement with respect to obligations concerning “undertakings”, as defined in the Agreement, and identified ss 11.2.2, 11.2.8, 11.2.9 and 11.5.11 as key items for consideration. The Province and the Agency proposed and attached a draft process (“Draft Consultation Process”) as a means to achieve those obligations.

This proposal divided the EA process into its constituent parts and indicated how the Applicant would be consulted at each stage of the process. [ 19 ] On August 13, 2010 Canada issued the Federal Aboriginal Consultation Framework for the Lower Churchill Hydroelectric Generation Project (“ Consultation Framework ”). The Agency sent the Consultation Framework to the Applicant on August 20, 2010.

It states that it sets out additional detail as to how the federal government would rely on the JRP process, to the extent possible, to assist in fulfilling its legal duty to consult Aboriginal groups with respect to the proposed Project. It identifies the Agency as being responsible for coordinating federal Aboriginal consultation during the EA and that the Agency would also fulfill the role of Crown Consultation Coordinator. As such, the Agency would ensure that the activities described in the Consultation Framework were carried out and that Aboriginal groups were well informed.

On September 7, 2010 the Agency met with representatives of the Applicant. The minutes of the meeting indicate that they were asked if they had any comments on the Consultation Framework . The response was that it was fine as it was fairly generic and contained nothing unexpected, however, that 45 days to prepare for the hearings was too short and it should be 90 days. At this meeting, the Applicant also expressed its view that the Project area as described by Nalcor was inadequate as it did not include Lake Melville.

[ 20 ] The Consultation Framework appears to follow the same general process as the May 2008 Draft Consultation Process, but with further detail. It divides the consultation into the following five phases, which are adopted below for convenience: • Phase 1 : Initial engagement and consultation on the draft JRP Agreement, the appointment of the JRP members and the EIS Guidelines; • Phase 2 : JRP process leading to hearings; • Phase 3 : Hearings and preparation of the JRP Environmental Assessment Report (JRP Report); • Phase 4 : Consultation on the JRP Report; and • Phase 5 : Regulatory permitting.

The evidence of DFO is that the Agency led the consultation in Phases 1-4, whereas DFO did so in Phase 5 (Affidavit of Stephen Chapman, Associate Director, Regional Operations, with the Agency, dated 22 October 2013 (“Chapman Affidavit”), paras 130, 132). Phase 1: Initial Engagement and Consultation on the Draft JRP Agreement, the Appointment of the JRP Members and the EIS Guidelines [ 21 ] Phase 1 included initial engagement and the preparation of the EIS Guidelines, the related consultation for which is described above.

It also included consultation on the draft JRP agreement (“JRP Agreement”), draft JRP terms of reference (“TOR”), and Panel selection. [ 22 ] On May 7, 2008 the Province, with the consent of the Agency and in accordance with Draft Consultation Process, provided the Applicant with the draft JRP Agreement and the draft TOR in advance of making these publicly available for comment on June 6, 2008. The Applicant was invited to provide comments and was advised that these would be given full and fair consideration and that a written response would be provided prior to the execution of the JRP Agreement and TOR.

The Applicant could also request a meeting with the Province and the Agency in an effort to resolve any concerns with the draft JRP Agreement and TOR. The Applicant did not provide any comments on these documents. [ 23 ] The JRP Agreement and TOR were finalized and released in January 2009.

Subsequently, these were amended to extend the comment period for the EIS by 30 days for three Aboriginal groups, including the Applicant, and to provide for translation of certain JRP documents into Aboriginal languages, including Inuktitut. [ 24 ] The JRP Agreement required the Panel to conduct the EA in a manner that discharged the requirements of the CEAA , NL EPA and TOR. All JRP hearings were to be public and to provide for the participation of Aboriginal groups, the public, governments, Nalcor and other interested parties.

Upon completion of the EA, the JRP was to prepare a report which would address the factors to be considered under s 16 of the CEAA and s 65 of the NL EPA , set out the rationale, conclusions and recommendations of the JRP relating to the EA, including any mitigation measures and follow-up program, and include a

summary of issues raised by Aboriginal groups, the public, governments and other interested parties (JRP Agreement, ss 4.2, 4.3 and 6.3). [ 25 ] The TOR set out the scope of the EA and the steps in the EA process.

With respect to the scope, it specifically addressed Aboriginal rights as follows: Aboriginal Rights Considerations The Panel will have the mandate to invite information from Aboriginal persons or groups related to the nature and scope of potential or established Aboriginal rights or title in the area of the Project, as well as information on the potential adverse impacts or potential infringement that the Project/Undertaking will have on asserted or established Aboriginal rights or title.

The Panel shall include in its Report: 1. information provided by Aboriginal persons or groups related to traditional uses and strength of claim as it relates to the potential environmental effects of the project on recognized and asserted Aboriginal rights and title. 2. any concerns raised by Aboriginal persons or groups related to potential impacts on asserted or established Aboriginal rights or title. The Panel will not have a mandate to make any determinations or

interpretations of: • the validity or the strength of any Aboriginal group’s claim to aboriginal rights and title or treaty rights; • the scope or nature of the Crown’s duty to consult Aboriginal persons or groups; • whether Canada or Newfoundland and Labrador has met its respective duty to consult and accommodate in respect of potential rights recognized and affirmed by s. 35 of the Constitution Act, 1982 ; and • the scope, nature or meaning of the Labrador Inuit Land Claims Agreement. [ 26 ] By letter of May 13, 2008 the Province invited the Applicant to propose three nominees for consideration for appointment to the JRP.

The Applicant proposed one nominee, Dr. Keith Chaulk, who was subsequently appointed as one of the five JRP members.

Phase 2: JRP Process Leading to Hearings [ 27 ] Phase 2 concerned the JRP process leading up to the public hearings, including consultation on the EIS and additional information requests (“IR”). The Applicant was one of eleven groups who received participant funding pursuant to s 58(1.1) of the CEAA . It received $23,471 for participation in Phase 2. [ 28 ] On February 17, 2009 Nalcor submitted its EIS to the JRP. The EIS, together with its component studies, comprised over 10,000 pages and incorporated a number of baseline studies and other information.

The JRP then initiated a 75-day public consultation process on the EIS. The public consultation process was subsequently extended by 30 days as some Aboriginal groups had not received notification of their participant funding until after the public review period had commenced. [ 29 ] On June 19, 2009 the Applicant provided a detailed response to the JRP in respect of the EIS.

This included its view that the study area of the EIS should be expanded, that the EIS contained no support for the statement that there was no reasonable possibility the Project would have an adverse environmental effect in the LISA, and, that the follow up program should include Lake Melville with focus on water temperature, salinity, primary production and methylmercury levels in fish and marine mammals. [ 30 ] Based on the comments received and the JRP’s own questions, 166 IRs regarding the EIS were sent to Nalcor in five rounds by the JRP.

Nalcor responded to each IR, submitting approximately 5000 pages of additional documentation. The JRP invited the public, Aboriginal groups and governments to review the additional information received from Nalcor and to provide comments. [ 31 ] On December 18, 2009 the Applicant submitted its comments to the JRP with respect to the additional information submitted by Nalcor.

Nalcor responded to the submissions on February 16, 2010. [ 32 ] On February 15, 2010 the JRP wrote to the Applicant advising that the information provided to date by Nalcor was insufficient and that additional information was required before it could conclude on the sufficiency of the EIS for the purpose of proceeding to public hearings. It advised that it had sent additional IRs to Nalcor, and encouraged the Applicant to participate and to provide information regarding traditional land and resource use to Nalcor.

It also invited the Applicant to provide to the JRP information related to the nature and scope of Aboriginal rights or title in the Project area and any potential adverse impacts or potential infringement of the Project on those rights or title, all as set out in the TOR. The JRP repeated this request on December 3, 2010. [ 33 ] During this time there were also various communications between the Applicant, the Agency and the JRP.

On January 14, 2011, the JRP determined that the EIS along with the information submitted in response to the IRs contained sufficient information to allow it to proceed to the public hearings phase of the EA. [ 34 ] On February 16, 2011 the Agency and DFO met with the Applicant to provide information on the hearings process and the process for consultation on the JRP Report. At this time the Applicant also discussed issues of concern to it, including downstream impacts.

DFO advised of its position that there was not enough evidence in the EIS to back up Nalcor’s conclusion that there would be no downstream effects in Lake Melville and that DFO, Health Canada and other federal departments would make a joint presentation on mercury concerns during the relevant public hearing. [ 35 ] On February 21, 2011 DFO provided to the JRP a

summary of its views on the EIS and related recommendations. DFO supported removal of all vegetation in the reservoir footprints and three meters above the full supply level prior to impoundment to lessen the extent of mercury release, but did not make a recommendation to that effect.

Further, because it was possible that mercury bioaccumulation as a result of the Project may be observed at a greater magnitude, for longer periods and further downstream than predicted by Nalcor, DFO recommended that Nalcor be required to develop a comprehensive program to monitor spatial and temporal changes in mercury in fish within the reservoirs and downstream following reservoir creation. The frequency and timing of sampling supporting a clear assessment of the magnitude and timing of changes and informed determinations as to risks to human health and implementation of fisheries management measures.

Further, DFO recommended that more baseline data be collected on mercury levels in estuarine fish downstream of Muskrat Falls and in Goose Bay in advance of inundation. Phase 3: Hearings and Preparation of the JRP Report [ 36 ] Phase 3 included the public hearings and the preparation of the JRP Report. The JRP held 30 days of hearings in nine locations in Newfoundland and Labrador and in Quebec between March 3 and April 15, 2011.

The Applicant made written submissions and participated in the public hearings, raising concerns about environmental, social, cultural and health effects of the Project, emphasizing the downstream effects, including methylmercury. In its written submissions the Applicant proposed recommendations and mitigation measures, including an accord between the Applicant and Nalcor concerning baseline establishment and monitoring of effects and compliance as a condition of approval, as well as clearing of all wood and brush within reservoir boundaries.

DFO participated in the hearings, as did other parties. [ 37 ] The JRP Report was issued on August 25, 2011. It is a comprehensive, 355 page document which describes the process leading to its issuance and, for each topic addressed in the report, sets out Nalcor’s views, the views of the participants and the JRP’s conclusions and recommendation(

s) concerning that topic. In total, the JRP made 83 recommendations, should the Project be approved. In

Chapter 17, the Panel’s Concluding Comments, and as summarized in the executive

summary, the JRP reported that it had determined that the Project would be likely to have significant adverse effects in the areas of: fish habitat and fish assemblage; terrestrial, wetland and riparian habitat; the Red Wine Mountain caribou herd; fishing and seal hunting in Lake Melville should consumption advisories be required; and, culture and heritage.

It also identified a range of potential Project benefits, as well as crucial additional information required before the Project should proceed in the areas of long-term financial returns, energy alternatives to serve island needs, and reducing uncertainty about downstream effects.

The JRP noted that it did not make the final decision about whether the Project should proceed but that government decision-makers would have to weigh all effects, risks and uncertainties in order to decide whether the Project was justified in the circumstances and should proceed in light of the significant adverse environmental effects identified by the JRP.

[ 38 ]

Chapter 6, Aquatic Environment, is particularly relevant to the issues raised by the Applicant in this application. There the JRP described the views of Nalcor and the participants on a number of issues including the fate of mercury and downstream effects. It identified the key issues that emerged from the review process which included: the effects of reservoir preparation; the fate of methylmercury in reservoirs; downstream effects below Muskrat Falls and the likelihood that Project effects, including bioaccumulation of mercury, would be seen in Goose Bay or Lake Melville; and follow-up monitoring.

Related to this are findings in Chapters 4, 8, 9, 10 and 13. [ 39 ] The JRP was not convinced that all effects beyond the mouth of the river would be “non-measurable” as defined by Nalcor.

It stated that while effects in Lake Melville were more difficult to predict on the basis of existing information, this emphasized the need for a precautionary approach, particularly because no feasible adaptive management measures had been identified to reverse either long-term adverse ecological changes or mercury contamination of renewable resources. [ 40 ] The JRP concluded that, based on the information before it, it was unable to make a significance determination with respect to the risk of long term alteration of ecological characteristics in the estuarine environment.

There was a risk that mercury could bioaccumulate in fish and seals in Goose Bay, and possibly in Lake Melville populations as well, but this would probably not represent a risk to the health of these species. While the implications on health and land use were addressed elsewhere in the JRP Report, Recommendation 6.7 addressed the need to take a precautionary approach to reduce uncertainty regarding both the potential ecological and mercury effects downstream.

As described in more detail later in these reasons, Recommendation 6.7 suggested that prior to impoundment, Nalcor be required to carry out a comprehensive assessment of downstream effects, including baseline mercury data collection and revised modelling to predict the fate of mercury in the downstream environment. [ 41 ] The significance of the potential for downstream mercury effects on Aboriginal and non-Aboriginal land and resource use, and on human health and communities was discussed by the JRP in Chapters 8, 9, and 13.

Phase 4: Consultation on the JRP Report [ 42 ] Phase 4 concerned consultation on the JRP Report and recommendations. The Applicant was provided with funding in the amount of $21,000 by the Agency’s participant funding program to support its engagement at this stage. [ 43 ] On August 31, 2011 the Applicant wrote to the Premier of the Province generally endorsing the JRP Report and highlighting key issues, including potential bioaccumulation of mercury downstream and the importance of fishing and seal hunting to Inuit, and requesting a meeting. A second request followed which was responded to on November 8, 2011.

In its response, the Province referenced the September 16, 2011 meeting that the Applicant had with the Agency, DFO, EC, and NL DEC, described below. [ 44 ] On September 9, 2011 the Agency wrote to the Applicant advising that consultation on the JRP Report and its conclusions and recommendations would be conducted to fulfill any applicable duty to consult that each government may owe to any Aboriginal government or group.

The letter requested that, prior to the governments taking any decision or course of action which would enable the Project to proceed, the Applicant prepare and submit its views on the JRP Report to the two governments within 45 days of the public release of the oral translation in Inuktitut of the JRP Report’s Executive

Summary. The letter stated that this consultation would seek to establish the Applicant’s views on whether all concerns about potential impacts of the Project on Labrador Inuit’s rights under the Agreement had been characterized accurately and on the manner and extent to which any recommended mitigation measures might serve to accommodate those concerns. Further, to determine whether there remained any outstanding issues. Full and fair consideration would be given to such views and, where requested, the governments would meet with the Applicant to discuss its views on the JRP Report.

The Agency advised that this consultation would inform reports to the federal and provincial Cabinets concerning the consultation process with the Aboriginal groups. [ 45 ] On September 16, 2011 representatives of the Agency, DFO, EC and NL DEC met with representatives of the Applicant in Goose Bay to discuss consultation on the JRP Report.

With respect to the process of consultation, the Agency’s meeting notes indicate that in response to the Applicant’s question of which government would respond to the JRP Report and to the responses of the Aboriginal groups, the Agency advised that the responses from Cabinets would very likely be general and a rationale may not always be given. However, that the departments would provide a rationale to the Aboriginal groups to the best of their ability as soon as possible after the Cabinets’ responses.

If the Applicant advised which recommendations were most important to it, the Agency and departments could focus on those in developing rationale. With respect to monitoring of downstream effects, the Applicant put forward its views, including that a comprehensive holistic approach to arctic science in Lake Melville should be funded, Inuit led and carried out utilizing ArcticNet, and, that specific wording for consumption advisories should be developed.

The August 30, 2013 Affidavit of Tom Sheldon, the Applicant’s Director of Environment (“Sheldon Affidavit”), indicates that he also emphasized the need for implementation of Recommendation 6.7 and agreed with the JRP’s recommendation for full clearing of the Muskrat Falls reservoir as well as the need for an agreement between Nalcor and the Labrador Inuit regarding further mitigation given the JRP’s conclusions and report (Sheldon Affidavit, para 32). [ 46 ] On November 11, 2011 the Applicant submitted the Nunatsiavut Government Response to Panel Report .

This acknowledged that the Applicant had spent considerable time participating in the EA process in order to assert its views that the Project would have potential negative effects on Labrador Inuit and their rights and title, environment, culture and way of life.

This participation had included approximately 30 separate submissions to the JRP and the Applicant stated that it was pleased that the JRP had found many of its concerns to be valid and that it agreed with many of the JRP’s recommendations. [ 47 ] The submissions recited the JRP’s findings with respect to downstream effects; referenced a recent study on the human health effects of prenatal and childhood exposure to environmental contaminants, such as methylmercury, on the health and development of Inuit children in northern Quebec that was released subsequent to the Panel hearings; included a table setting out its response to each JRP Recommendation; and, set out three major recommendations that the Applicant submitted would help to mitigate impacts on Inuit and Inuit rights and to allow Inuit to constructively contribute to the Project process going forward.

These are summarized as follows: i . Inuit representation on management structure

This asserted a fundamental right to participate as a part of a high level management mechanism for the proposed Project which would consist of the Nunatsiavut Government, the Innu Nation, the Province and Canada; ii . Inuit rights, Inuit research – baseline studies and monitoring This asserted a right of Inuit to conduct and lead baseline research and monitoring into a broad suite of potential impacts that the Project would have on Inuit and Inuit rights.

It also asserted a moral and legal obligation on Nalcor, Canada and the Province to fund this, and requested a minimum of $200,000 per year for a program specifically designed to establish baseline conditions directly related to Inuit rights. The Applicant asserted a need for a large scale, comprehensive understanding of the downstream environment and how changes would impact Inuit (biophysical, cultural, socioeconomic and health impacts). It asserted that research should be led by Inuit, who would collaborate with Nalcor and governments, and who would utilize ArcticNet for this purpose; and iii .

Compensation related to impacts on Inuit and Inuit rights as a result of the Project This asserted that framework language should be included as a condition of permits associated with the development of the Project to ensure that Inuit have a mechanism for compensation if any listed impact, including losses related to harvesting and cultural practices and unplanned events, should arise. [ 48 ] On December 21, 2011 the Applicant wrote to the Premier of the Province (Canada was copied on the letter) requesting a meeting between senior political levels of the Province, Nalcor and the Nunatsiavut Government prior to the announcement of the Province’s response to the JRP Report.

The Premier responded the following day, and a meeting was held on January 9, 2012. The meeting was attended by representatives of the Applicant and the Province. [ 49 ] By letter of January 16, 2012 to the Minister of Natural Resources for the Province (cc’d to the Ministers for DFO, EC and others), the Applicant set out four core mitigative measures proposed during that meeting.

These included the three major recommendations in the Applicant’s response to the JRP Report (summarized above), as well as Inuit priority for jobs, training and business opportunities associated with the Project, second only to Innu. [ 50 ] On January 24, 2012 the Agency prepared an internal report entitled Lower Churchill Hydroelectric Generation Project: Report on Aboriginal Consultation Associated with the Environmental Assessment (“ Aboriginal Consultation Report ”) which states that it describes how the federal government consulted with Aboriginal groups in the context of the EA, in particular, how it had relied on the JRP process, to the extent possible, to assist in discharging its legal duty to consult.

The report states that it describes the positions of the Aboriginal groups with respect to how the potential adverse environmental effects of the proposed Project may impact their potential or established Aboriginal or treaty rights, which information was derived from presentations the Aboriginal groups made to the JRP and from comments made by the groups directly to federal government department officials. [ 51 ] On January 30, 2012 Ray Finn, DFO’s Regional Director of Ecosystems Management, Newfoundland and Labrador Region, prepared a memorandum for DFO’s Regional Director General for Newfoundland and Labrador (“DFO Regional Director General”) which provided an update on the EA for the Project and on consultations to that point with Aboriginal groups.

Amongst other things, the background

section of the memorandum noted that DFO had participated in Aboriginal consultation on the JRP Report, led by the Agency, during the review and development of Canada’s response. Further, that the Innu Nation and Nunatsiavut Government “are generally supportive of the project” , while the Nunatsiavut and Innu groups of Quebec believed they were not adequately considered during the JRP process.

Under the “Analysis / DFO Comment” section, it is noted that Canada’s response was currently being completed for submission to Cabinet on February 8, 2012 and that DFO would participate in the review and finalization of the Aboriginal Consultation Report to ensure Aboriginal concerns had been addressed, where appropriate, prior to Canada making its decision. [ 52 ] The Government of Canada Response to the Report of the Joint Federal-Provincial Review Panel for Nalcor’s Lower Churchill Generation Project in Newfoundland and Labrador (“Canada’s Response”), which responded to the JRP Report and its recommendations, was approved by the Governor General, on the recommendation of the Minister of Fisheries and Oceans, pursuant to s 37(1.1)(

a) of the CEAA , by Order-in-Council dated March 12, 2012. It was published on the Agency Registry on March 15, 2012. The Province’s response was issued on the same day. [ 53 ] Canada’s Response states that it was prepared by the RAs (DFO, TC and NRC) pursuant to s 37(1.1) of the CEAA , in consultation with other federal agencies.

It states that in preparing the response, the RAs reviewed the JRP Report, as well as a subsequent independent supply report commissioned by Nalcor, an economic analysis of the Project that was conducted by Canada, and comments submitted by Aboriginal groups and other stakeholders during and following the JRP process. [ 54 ] In considering whether the significant adverse environmental effects of the Project could be justified in the circumstances, Canada’s Response stated that it accounted for the potential adverse effects of the Project, the commitments that had been made by the federal government in relation to the recommendations provided in the JRP Report, and the commitments made by Nalcor in its EIS and during the JRP hearings.

Canada would require certain mitigation measures, environmental effects monitoring and adaptive management be undertaken by Nalcor, as well as require additional studies on downstream effects. This would be done through inclusion of the requirements in federal authorizations and approvals.

Canada’s Response stated that ensuring that those commitments were carried out would minimize the negative effects of the Project and reduce the risks associated with the uncertainty about the success of mitigation measures. [ 55 ] Further, Canada’s Response stated that the potential social, economic and environmental benefits for the Province, communities and Aboriginal groups, as well as benefits beyond the Province, were also considered, as was an economic analysis of the Project that was conducted by Canada. [ 56 ] Canada determined that the expected significant energy, economic, socio-economic and environmental benefits outweighed the significant adverse environmental effects of the Project identified in the JRP Report:

Therefore the Government of Canada concludes that the significant adverse environmental effects of the Lower Churchill Hydroelectric Generation Project are justified by the benefits of the Lower Churchill Hydroelectric Generation Project. (Canada’s Response, p 8) [ 57 ] As to the Course of Action Decision, Canada’s Response noted that s 37(1.1)(

c) of the CEAA indicates that the RAs’ course of action shall be in conformity with the approval of the Governor-in-Council, and that, pursuant to s 37(1), if the Project is likely to cause significant adverse environmental effects that can be justified in the circumstances, the RAs may exercise any power or duty that would permit the Project to be carried out, in whole or in part. As such: […] Fisheries and Oceans Canada and Transport Canada may issue any subsection 35(2) and s. 32 Fisheries Act authorizations and any

Part 1,

Section 5 of the Navigable Waters Protection Act approvals associated with the Project, respectively… Under, [sic] subsection 37(2.2) of the Canadian Environmental Assessment Act , a Responsible Authority is required to ensure the implementation of mitigation measures for an approved Project.

Similarly, under subsection 38(2) of the Canadian Environmental Assessment Act , the Responsible Authorities will ensure the implementation of follow-up programs that determine the accuracy of the conclusions of the environmental assessment and the effectiveness of the mitigation measures. (Canada’s Response, pp 8-9) [ 58 ] Canada’s Response then addressed each of the JRP Recommendations that were directed to the federal government. [ 59 ] As to Recommendation 6.7, Canada’s Response stated that the Government of Canada agreed with the intent of that recommendation and noted that it was directed to Fisheries and Oceans Canada.

It went on to say that, as a condition of a s 35(2) authorization under the Fisheries Act , and prior to impoundment, DFO would require Nalcor to collect additional baseline data on bioaccumulation of methylmercury in fish and on fish habitat downstream of Muskrat Falls.

DFO would also require Nalcor to conduct a comprehensive multi-year program to monitor and report on bioaccumulation of methylmercury in fish (including seals) within the reservoirs and downstream, including the Goose Bay/Lake Melville area, and to carry out multi-year post-project monitoring and reporting downstream into Lake Melville on a variety of parameters including nutrients, primary production, fish habitat utilization and sediment transport in order to assess changes to downstream fish habitat. [ 60 ] On March 16, 2012, in conformity with the Governor-in-Council’s approval of Canada’s Response, the three RAs issued their course of action decision pursuant to s 37(1) of the CEAA (“Course of Action Decision”).

The Course of Action Decision stated that the RAs may exercise any power or perform any duty or function with respect to the Project because, after taking into consideration the JRP Report and the implementation of appropriate mitigation measures, the RAs were of the opinion that the Project is likely to cause significant adverse environmental effects that can be justified in the circumstances.

The Course of Action Decision noted that a follow- up program to verify the accuracy of the EA and/or determine the effectiveness of any mitigation measures was required for the Project, and that the estimated dates of the follow-up program were October 1, 2012 to October 1, 2037.

Phase 5: Regulatory Permitting [ 61 ] Phase 5 of the consultation process concerned regulatory permitting leading to the issuance of the Authorization. [ 62 ] By letter of April 23, 2012 the Agency advised the Applicant that responsibility for leading and coordinating Crown consultation for the federal government was being transferred from the Agency to DFO for the Phase 5 consultations. [ 63 ] On July 9, 2012 DFO wrote to the Applicant stating that, pursuant to the Consultation Framework , the federal government was entering the regulatory permitting phase (Phase 5) for the Project and wished to continue consultations respecting specific regulatory decisions, approvals or actions that may have potential adverse impacts on their asserted Aboriginal rights or title.

DFO advised that the federal government anticipated issuing three kinds of approvals: the ss 32 and 35(2) Fisheries Act authorizations from DFO and the s 5 approval under the NWPA from TC.

DFO proposed to conduct consultations during the regulatory phase in accordance with an attached Proposed Protocol for Regulatory Phase Aboriginal Consultation Lower Churchill Generation Project (“ Regulatory Phase Protocol ”), and sought comments on the proposed process within 14 days. [ 64 ] The proposed Regulatory Phase Protocol stated that it followed the Consultation Framework , and involved a five step process within Phase 5.

First, upon receipt of the Fish Habitat Compensation Plan (“FHC Plan”) or the Environmental Effects Monitoring Program (“EEM Plan”), both conditions of the Fisheries Act Authorization, or a Request for Work Approval per the NWPA , the departments would provide those documents and relevant supporting information to the Applicant, who would then have 30 days to review it. Regulatory approvals would not be issued prior to the end of that timeframe and consideration of any comments received. Second, 10 days prior to the end of the timeframe to submit comments, a reminder would be sent to the Applicant.

Third, if no comments had been received when the timeframe ended, the Applicant would be notified that the approval or authorization would be considered and, if appropriate, approved. If comments were received, then within 30 days of receipt, the departments would give them full and fair consideration and would respond to them in writing. Fourth, the departments would incorporate changes as appropriate.

And fifth, within 14 days of issuance of the Fisheries Act authorization and the NWPA approval they would be sent to the Applicant. [ 65 ] On July 24, 2012 the Applicant provided comments on the draft Regulatory Phase Protocol .

The Applicant took the position that, in order to align the Regulatory Phase Protocol with the Agreement and the meaning of “Consult” therein: the Fisheries Act authorization and the NWPA approval should not be issued prior to Project sanction by both levels of government; the timeframe for the Applicant to prepare its comments should be increased to 90 days and, upon request, the Applicant should be permitted the opportunity and funding to present its views in person to DFO; where the Applicant provided comments, DFO should not provide a response to those comments in less than 15 days, in order to ensure adequate time for full and fair consideration; and, the Fisheries Act authorization and the NWPA approval should be sent to the Applicant on the date of issuance.

[ 66 ] A revised and final Regulatory Phase Protocol adopted a 45 day time frame for the Applicant to submit comments and confirmed that regulatory approvals would not be issued prior to the end of that timeframe and consideration of comments received. The revised protocol added that within 10 days of receipt, the Applicant could request a meeting with the RA to discuss the application/document, to be held within the 45 day review period. Finally, the amended protocol stated that copies of the Fisheries Act authorization and the NWPA approval would be provided to the Applicant within 5 days of issuance.

DFO sent the finalized Regulatory Phase Protocol to the Applicant on February 21, 2013. [ 67 ] Nalcor provided a draft FHC Plan to the Applicant on December 21, 2012 and invited the Applicant to a public information session, which would provide a technical briefing on the FHC Plan and EEM Plan, held on January 16, 2013.

Nalcor also met with the Applicant on January 23, 2013 to present details of the FHC Plan and EEM Plan, at which time the Applicant raised a number of concerns. [ 68 ] A February 5, 2013 DFO memorandum for the DFO Regional Director General addressed the status of aboriginal consultations for Phase 5. Amongst other things, it noted that comments received on the proposed protocol indicated that some Aboriginal groups still had concerns about the EA that they felt had not been addressed.

The majority of these related to impacts on Aboriginal rights and title, caribou, cumulative impacts, and the lack of land and resource use studies. “Close the loop” letters addressing the outstanding EA issues were to be sent to Aboriginal groups prior to sending the finalized Regulatory Phase Protocol . [ 69 ] On February 12, 2013, the Applicant met with the Minister of Fisheries and Oceans to discuss its concerns about the Project.

The Applicant provided a power point that restated its concerns about downstream effects, the JRP’s findings and that Nalcor was not conducting a comprehensive assessment of downstream effects as recommended by the JRP which, in its view, put Inuit health and well- being at risk because Nalcor’s approach was reactive rather than proactive. [ 70 ] It also stated that preliminary data gathered by research being conducted on behalf of the Applicant suggested that total mercury from the Churchill River extends into Lake Melville and the LISA and sought, as a condition of the s 35(2) Fisheries Act authorization, that Nalcor be required to provide the Applicant with annual funding of $200,000- $500,000 for its research and monitoring of the overall effects on the downstream environment.

Further, that meaningful engagement of the Applicant as a government, not a stakeholder, was required. [ 71 ] A February 21, 2013 memorandum for the Deputy Minister of DFO summarized the status of Aboriginal consultations for Phase 5.

It anticipated that DFO would complete the consultations by mid-May and should be in a position to issue a Fisheries Act authorization by June 2013. [ 72 ] On February 28, 2013, DFO wrote to the Applicant advising that it was preparing to issue a Fisheries Act authorization and provided the draft FHC Plan and EEM Plan, as received from Nalcor, and sought comments on the two plans within 45 days as per the Regulatory Phase Protocol .

The Applicant did not provide comments on the FHC Plan, but on several occasions expressed concerns regarding inadequacies in the EEM Plan with respect to baseline data, as described below. [ 73 ] On March 22, 2013 the Applicant met with DFO to discuss the EEM Plan. Amongst other things, the Applicant suggested that the current draft EEM Plan was too basic, and that a much more comprehensive scientific investigation of the Lake Melville ecosystem as a whole was necessary to understand current baseline conditions and to answer future questions as to Project effects.

The Applicant gave examples of additional parameters to be studied. DFO responded that it would require Nalcor to implement an EEM Plan to satisfy the CEAA monitoring requirements and to verify specific predictions, but not to undertake foundational environmental research (Finn Affidavit, para 83).

The Applicant also sought accommodation by way of a requirement by DFO that Nalcor, as a condition of the Authorization, provide funding to the Applicant to complete a comprehensive mercury study to inform the Human Health Risk Assessment, as well as a thorough Lake Melville ecosystem study, so that the Applicant could ensure appropriate baseline study was conducted. [ 74 ] On April 15, 2013 the Applicant wrote to DFO providing comments on the draft EEM Plan.

The Applicant stated that the EEM Plan was not of sufficient form and detail to allow it to prepare its views or to determine if it would be an effective monitoring tool both adjacent to and within the LISA, and that it had not been provided with any additional documentation or detail since expressing this view to Nalcor on January 25, 2013 and to DFO on March 22, 2013. The Applicant stated that the Phase 5 consultation did not meet the definition of “Consult” as found in the Agreement.

The Applicant referred to Recommendation 6.7 and stated that a comprehensive assessment of downstream effects into Lake Melville had still not been completed nor was one planned. [ 75 ] The Applicant stated that the EEM Plan was premised on the assumption by Nalcor that a monitoring program can be in place for a system, Lake Melville, that is not well understood. The Applicant asserted that the basic science of monitoring required that the system being monitored be well understood prior to a monitoring program being established.

After a baseline understanding of the Lake Melville system was acquired, an EEM Plan of sufficient form and detail could then be developed. Nalcor’s refusal to conduct a holistic downstream effects analysis, as recommended by the JRP, resulted in an EEM Plan that did not have sufficient baseline understanding, form and detail to allow the Applicant to prepare its views. By not requiring Nalcor to carry out a comprehensive downstream effects assessment, DFO was not respecting the constitutionally protected rights of the Applicant, including that of consultation.

The Applicant stated that it was leading the only comprehensive downstream effects assessment, as per Recommendation 6.7, and that this assessment included mercury, oceanography, climate, sea ice, human health risk assessment and socioeconomic components. Based on results to date, it was known that the Churchill River is a substantial source of total mercury to Lake Melville and that the mercury influence from the river can be detected at least 150 km from the river mouth.

The Applicant also again requested that DFO require Nalcor, as a condition of the Authorization, to provide funding to the Applicant for the completion of its comprehensive downstream effects assessment. [ 76 ] On May 30, 2013 DFO responded to the Applicant’s comments on the EEM Plan. DFO stated that it was of the view that the plan contained sufficient detail to allow the Applicant to prepare its views and comment on it.

And, based on comments that it had received, DFO would require Nalcor to add to the EEM Plan some additional details on the protocols for sampling and analysis of fish and seals for methylmercury currently set out in baseline monitoring reports. As to Recommendation 6.7, Canada’s Response stated that

Nalcor would be required to collect additional baseline data on methylmercury bioaccumulation in fish and on fish habitat downstream of Muskrat Falls prior to impoundment. This information was collected by Nalcor in 2011 and 2012, including in Lake Melville, and would continue to be collected prior to impoundment. DFO stated that it wished to clarify that the primary objective of an EEM or follow-up program is to verify specific predictions made by a proponent during an EA, especially where there may be uncertainty about the severity or extent of a possible impact.

EEM programs are not designed or implemented to study environments or changes in them overall. The Nalcor EEM Plan with respect to fish and fish habitat addressed those predictions for which DFO considered monitoring to be required for verification, including in relation to methylmercury bioaccumulation in fish. As to the Applicant’s view that DFO was not respecting the Applicant’s consultation rights, DFO stated that it was consulting with the Applicant in accordance with the Regulatory Phase Protocol which was developed in consideration of and consistent with the Agreement.

Finally, as to the Applicant’s funding request, DFO stated that it typically sets out monitoring and reporting requirements that a proponent must meet in a s 35 Fisheries Act authorization, but does not specify who a proponent is to engage to carry this out.

DFO would require Nalcor to make raw data and results of the EEM Plan available to interested parties, and encouraged the Applicant to discuss the sharing of monitoring results and possible collaboration in monitoring directly with Nalcor. [ 77 ] Following various communications between Nalcor and DFO, Nalcor submitted its revised, final EEM Plan and FHC Plan on June 26, 2013 and DFO advised Nalcor the next day that these were acceptable to DFO and would be attached as conditions to the Authorization. [ 78 ] On June 28, 2013 DFO, on behalf of Canada, responded to the Applicant’s November 11, 2011 and July 24, 2012 letters, addressing the concerns raised therein on a point by point basis.

It stated that these concerns were taken into account when the federal government responded to the JRP Report, as indicated in Canada’s Response.

With respect to the Applicant’s concerns regarding significant adverse effects should consumption advisories or other impacts arise, and the Applicant’s requests for participation on a high level management structure and for framework language for compensation as a condition of any permits, DFO stated that a high level management structure was not contemplated for the Project, but that DFO and TC would be consulting with the Applicant in the context of their regulatory functions and that DFO had consulted with the Applicant on the EEM Plan and FHC Plan it was requiring as conditions of Fisheries Act Authorization.

Further, that it was requiring Nalcor to collect data on methylmercury in fish and seals as part of the EEM Plan which would be forwarded to Health Canada for subsequent advice on consumption levels, and that Nalcor was responsible for relaying that information to the Applicant and posting any consumption advisories.

Finally, that the requested framework language would not be included as a condition of the authorizations or approval as it would not be enforceable as a condition under the Fisheries Act or the NWPA . [ 79 ] As to the Applicant’s concerns regarding monitoring and assessment of environmental effects and the Applicant’s suggestion that it be funded to develop and implement a program specifically designed to establish baseline conditions directly related to Inuit rights, DFO advised that as a condition of any s 35(2) authorization under the Fisheries Act , and prior to impoundment, DFO was requiring Nalcor to collect additional baseline data both in the Muskrat Falls reservoir and downstream of Muskrat Falls into Goose Bay/Lake Melville, including data on fish and fish habitat utilization as well as mercury levels in both fish and seals.

DFO would require Nalcor to conduct a comprehensive multi-year program to monitor and report on bioaccumulation of methylmercury in fish (including seals) in those areas after creation of the Muskrat Falls reservoir. Additionally, DFO would require Nalcor to carry out multi-year post-project monitoring and reporting downstream into Lake Melville on a variety of parameters including nutrients, primary production, fish habitat utilization and sediment transport in order to assess changes to downstream fish habitat.

The monitoring requirements of any Fisheries Act authorization are the responsibility of Nalcor, and those associated with the bioaccumulation of mercury would be outlined in the EEM Plan which was sent to the Applicant for review and input prior to finalizing. The letter also apologized for the late response but noted that consultation on the regulatory approvals had occurred since the Applicant’s letters. [ 80 ] The Applicant’s concerns were reiterated in a letter to the Minister of Fisheries and Oceans on July 2, 2013.

The Applicant stated that throughout the EA and post-EA process, Nalcor had not provided meaningful baseline measurements or conducted sufficient research to characterize the downstream environment that would be impacted by the Project, particularly in Lake Melville. [ 81 ] Further, that Canada’s Response to Recommendation 6.7 was an extreme simplification of its intent. The response eliminated the need to understand the downstream environment at a holistic level and the ability to model or predict downstream impacts prior to flooding.

This simplification was reflected in the EEM Plan, which required the collection of baseline methylmercury data only in fish and seals, such that downstream impacts related to mercury would only be detected once concentrations have increased in country foods that Inuit consume and depend on for their health. The Applicant asserted that accurate prediction is critical to permit preventative mitigation measures.

Absent an accurate understanding of the pathways and fate of mercury, the only mitigation measure available would be consumption advisories, which would constitute a threat to Inuit food security and health and would violate Inuit rights.

The Applicant stated that it considered any increase in mercury concentrations downstream to be a significant impact, irrespective of harvesting advisories which should be a mitigation measure of last resort only, and one for which compensation must be available. [ 82 ] The Applicant further stated that although the JRP found that the uncertainty as to whether consumption advisories would be required beyond the mouth of the Churchill River needed to be resolved before reservoir filling proceeds, DFO was not requiring Nalcor to conduct any meaningful work related to this.

The Applicant stated that more certainty in predictions regarding downstream impacts was needed, and that this required an understanding of the entire Lake Melville system and mercury behaviour within that system related to Muskrat Falls. Further, that the preliminary data of research being conducted by the Applicant validated the Applicant’s concerns.

The Applicant took the position that DFO should change the conditions of its Authorization and the EEM Plan to account for this preliminary research and to accommodate the Applicant’s concerns. [ 83 ] The Applicant stated that DFO’s complete disregard of Inuit concerns throughout the entire EA process, including the May 30, 2013 response, indicated that neither good faith consultation nor accommodation had taken place. The letter listed three items of concern and requested Ministerial intervention in the decisions being made by DFO.

These are summarized as follows: • the need for a comprehensive baseline report on mercury in water, sediments and biota that also identifies all possible pathways for mercury throughout the food web downstream from the Project, including throughout Lake Melville to provide basic foundational knowledge of the environment which is essential for the prediction of downstream impacts as a result of flooding, as well as for the

formulation of a meaningful EEM Plan and consultation respecting that plan; • while the total elimination of increased mercury and methylmercury concentrations downstream may be impossible, the primary and only mitigation measure that could reduce the risk or concentrations of mercury prior to flooding is full clearing of the reservoir area, including trees and the top layer of organic matter. A first step towards accommodation would be to require this; and • consumption advisories are not an acceptable approach to mitigation, as Inuit rights and well-being cannot be put at potential risk for economic benefits.

Any potential increase in mercury or methylmercury concentrations downstream would be a direct violation of Inuit human, treaty, and individual rights. [ 84 ] On July 9, 2013 the Authorization for the Project was issued to Nalcor, pursuant to ss 32(2)(

c) and 35(2)(

b) of the Fisheries Act , for the harmful alteration, disruption or destruction of fish habitat and the killing of fish. It is this Authorization that the Applicant has sought to have judicially reviewed. [ 85 ] The Authorization is eleven pages in length and lists a number of Conditions of Authorization.

A few of the particularly relevant conditions are summarized as follows: • Condition 1.1 states that if, in DFO’s opinion, the authorized impacts to fish and fish habitat are greater than previously assessed, DFO may suspend any works, undertakings, activities and/or operations associated with the proposed development to avoid or mitigate adverse impacts to fish and fish habitat. DFO can also direct Nalcor to carry out any modifications, works or activities necessary to avoid or mitigate such further adverse impacts.

If DFO is of the view that greater impacts may occur than were contemplated by the parties, then it may also modify or rescind the Authorization. • Condition 1.4 requires Nalcor to undertake the Project in accordance with the EIS, the Project Wide Environmental Protection Plan and the FHC Plan. • Condition 6 requires Nalcor to undertake an EEM program, as outlined in the EEM Plan, to monitor and verify the predicted impacts of the Project from a fish and fish habitat perspective including Project-related downstream effects, methylmercury bioaccumulation in fish, and, fish entrainment at the Muskrat Falls facility, in accordance with conditions 6.1-6.5.

This includes annual monitoring of methylmercury bioaccumulation to determine levels in resident fish species, including seals, both within the reservoir and downstream as per the established monitoring schedule, as well as a requirement to record and report peak levels and subsequent decline to background levels (Condition 6.3).

There are also a number of reporting mechanisms as well, including annual reports and comprehensive EEM Plan reports every 5th year starting in 2023. [ 86 ] By letter of July 9, 2013 DFO advised the Applicant that the Authorization had been issued, and provided it with a copy. [ 87 ] Subsequently, by letter of July 12, 2013 to the Applicant, the Minister of Fisheries and Oceans addressed several issues, including that at the February 12, 2013 meeting the Applicant had presented information concerning its interest in a downstream research and monitoring program.

The Minister stated that, as set out in Canada’s Response, DFO would require Nalcor to carry out a comprehensive multi-year program to monitor and report on mercury levels downstream of the Project both before and after reservoir creation. Although the Authorization had already been issued, the Minister stated that Nalcor had developed an EEM Plan which was being reviewed by DFO and, once approved, would become a condition of the s 35 Fisheries Act Authorization.

The Minister also referenced the February 28, 2013 letter from his officials encouraging the Applicant’s participation in the review of the EEM Plan, and again encouraged the Applicant to engage with DFO on the finalization of the requirements that DFO would impose on Nalcor by way of the Authorization. The Minister also noted that DFO had no role in Nalcor’s decision as to who it engaged to carry out the monitoring required by the Authorization. [ 88 ] On August 27, 2013 the Minister wrote to the Applicant responding to its July 2, 2013 letter.

The letter noted that the JRP had considered predictions concerning methylmercury bioaccumulation that may arise as a result of the Project and the need for consumption advisories. Further, that Canada agreed with the intent of the JRP’s Recommendations in relation to downstream effects.

And, pursuant to Canada’s Response, DFO was requiring Nalcor to collect additional baseline data on methylmercury bioaccumulation in fish and on fish habitat downstream of Muskrat Falls prior to impoundment and to conduct a comprehensive long term program to monitor bioaccumulation of methylmercury in fish (including seals) downstream of Muskrat Falls and into Lake Melville. That EEM monitoring would follow up on predictions that the bioaccumulation of methylmercury at distances downstream of the reservoir, and particularly in Lake Melville, would not have significant adverse effects.

Follow-up monitoring of this type was required and implemented to verify specific predictions, rather than to provide basic foundational knowledge of the environment. [ 89 ] The Minister also noted that DFO had consulted with the Applicant in the process of reviewing the EEM Plan and preparing conditions of the Authorization, and had considered comments and advice received from the Applicant, which led to some additions to the monitoring plans. DFO also carried out rigorous reviews of the monitoring plans.

As to the suggestion that the removal of trees and organic matter from the reservoir would be an appropriate mitigation measure, Canada’s Response agreed with the intent of the JRP Recommendations on that issue, but did not commit to undertaking a pilot study or to other recommended actions in that regard. The Minister noted that requirements related to clear cutting of vegetation falls under provincial legislation.

The Minister stated that she was confident that the monitoring was adequate to verify predictions about downstream aquatic effects and that it would allow Canada to continue to make decisions that consider and protect the interests of the Applicant. III. Issues [ 90 ] The Applicant submits that the issue is: 1. Whether its rights under s 35(1) of the Constitution Act, 1982 , being

Schedule B to the Canada Act 1982 (UK), 1982, c 11 [ Constitution Act, 1982 ] and under the Agreement have been respected and, in particular, whether its rights to consultation and

accommodation were met. Resolving this issue involves assessing: a. whether the consultation process was correctly carried out and met the standards dictated by the Agreement and by the ConstitutionAct, 1982; and b. whether its views were given full and fair consideration and accommodation in good faith prior to DFO issuing the Authorization. [91] Canada submits the issues in the form of statements, being that: 1. The content of the duty to consult is defined by the Agreement; and 2. Canada’s consultation efforts were reasonable. [92] Nalcor submits that the issues are: 1.

What is the standard of review of the Authorization? 2. Did DFO fulfill the Crown’s duty to consult with and, if necessary, accommodate the Applicant in respect of the Authorization? [93] In my view, the issues can be restated as follows: 1. What is the standard of review? 2. What is the content of the duty to consult and accommodate, more specifically: a. Does the Agreement exhaustively define the Crown’s duty to consult? b. What was the scope and extent of the duty to consult and of any duty to accommodate in this case? 3. Did Canada satisfy its duty to consult and accommodate?

Issue 1: What is the Standard of Review? Applicant’s Position [94] The Applicant submits that Canada’s decision to issue the Authorization is subject to review on the standard of correctness. The duty to consult in this matter arises under the common law and in the specific context of the Agreement, which is a modern treaty forthe purposes of s 35(1) of the Constitution Act, 1982.

The Supreme Court of Canada has identified the appropriate standard of review forassessing whether consultation has occurred in the context of a modern treaty (Beckman v Little Salmon/Carmacks First Nation, 2010SCC 53 at para 48 [Little Salmon]; Haida Nation v British Columbia (Minister of Forests), 2004 SCC 73 [Haida]). [95] The requirements of the duty to consult are determined on the standard of correctness. Only if there was adequateconsultation does the question of whether the decision to issue the Authorization was reasonable arise.

Canada’s Position [96] Canada agrees that the question of the content of the duty to consult is reviewable on the correctness standard (Innu ofEkuanitshit v Canada (Attorney General), 2013 FC 418 at para 97 [Ekuanitshit FC]; Little Salmon at para 48) but submits that thequestion of whether Canada’s efforts satisfied its duty to consult is reviewable on the reasonableness standard (Ekuanitshit FC at para 97;Katlodeeche First Nation v Canada (Attorney General), 2013 FC 458 at paras 126-127 [Katlodeeche]; Cold Lake First Nations v Alberta(Tourism, Parks and Recreation), 2013 ABCA 443 at paras 37-39, leave to appeal to SCC refused, [2014] SCCA No 62 [Cold Lake]).

Nalcor’s Position [97] Nalcor submits that insofar as the Applicant is attacking the decision-making of the Minister under the Fisheries Act, thestandard of review is reasonableness, and deference is owed absent a decision made in bad faith or on the basis of irrelevantconsiderations (Malcolm v Canada (Minister of Fisheries and Oceans), 2013 FC 363 at para 57; Vancouver Island Peace Society vCanada, (FC), [1992] 3 FC 42 (TD) at paras 7, 12; Alberta Wilderness Assn v Express Pipelines Ltd, (FCA), 137 DLR (4th) 177 (FCA) at para 10; Alberta Wilderness Assn v Cardinal River Coals Ltd, (FC),[1999] 3 FC 425 (TD) at paras 24-26). [98] As to the adequacy of consultation and accommodation, Nalcor submits that the extent of the duty is reviewable on a standardof correctness since the legal requirements are expressly set out in the Agreement (Haida at para 61; Agreement, s 11.6.2).

However,where the extent of these requirements depends on findings of fact, the standard is one of reasonableness (Haida at paras 61, 63;Ka’a’Gee Tu First Nation v Canada (Attorney General), 2012 FC 297 [Ka’a’Gee Tu #2] at paras 91, 121; Agreement, s 1.1.1). Finally,whether the consultation process was adequately carried out requires deference since it involves determinations of fact and applicationsof the law to the facts (Cold Lake at para 39; Taku River Tlingit First Nation v British Columbia (Project Assessment Director), 2004SCC 74 at para 40 [Taku River]; Ka’a’Gee Tu #2 at paras 91, 121).

Analysis [99] A standard of review analysis need not be conducted in every instance. Instead, where the standard of review applicable to a

particular question before the Court is well-settled by past jurisprudence, the reviewing court may adopt that standard (Dunsmuir v NewBrunswick, 2008 SCC 9 at para 62 [Dunsmuir]; Innu of Ekuanitshit v Canada (Attorney General), 2014 FCA 189 at para 38, leave toappeal to SCC refused [2014] SCCA No 466 [Ekuanitshit FCA]). [100] The standard of review applicable to the duty to consult was addressed by the Supreme Court of Canada in Haida, which statedthat: [61] On questions of law, a decision-maker must generally be correct: for example, Paul v.

British Columbia (Forest AppealsCommission), [2003] 2 S.C.R. 585, 2003 SCC 55. On questions of fact or mixed fact and law, on the other hand, a reviewing body mayowe a degree of deference to the decision-maker. The existence or extent of the duty to consult or accommodate is a legal question in thesense that it defines a legal duty. However, it is typically premised on an assessment of the facts. It follows that a degree of deference tothe findings of fact of the initial adjudicator may be appropriate.

The need for deference and its degree will depend on the nature of thequestion the tribunal was addressing and the extent to which the facts were within the expertise of the tribunal: Law Society of NewBrunswick v. Ryan, [2003] 1 S.C.R. 247, 2003 SCC 20; Paul, supra. Absent error on legal issues, the tribunal may be in a better positionto evaluate the issue than the reviewing court, and some degree of deference may be required. In such a case, the standard of review islikely to be reasonableness.

To the extent that the issue is one of pure law, and can be isolated from the issues of fact, the standard iscorrectness. However, w

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