Rio Tinto Alcan Inc

File No. 33132

IN THE SUPREME COURT OF CANADA (ON APPEAL FROM THE COURT OF APPEAL FOR BRITISH COLUMBIA)

BETWEEN:

RIO TINTO ALCAN INC. and BRITISH COLUMBIA HYDRO AND POWER AUTHORITY

Appellants (Respondents)

and

CARRIER SEKANI TRIBAL COUNCIL

Respondent (Appellant)

and

THE BRITISH COLUMBIA UTILITIES COMMISSION

Intervener (Respondent)

APPELLANT’S FACTUM RIO TINTO ALCAN INC., APPELLANT

(Rules 35 and 42 of the Rules of the Supreme Court of Canada)

Rio Tinto Alcan Inc., Appellant Agent for Rio Tinto Alcan Inc.

Daniel A. Webster, Q.C. Brian A. Crane, Q.C. David W. Bursey Gowling Lafleur Henderson LLP Ryan D.W. Dalziel 2600-160 Elgin Street Bull, Housser & Tupper LLP Box 466 Station D 3000-1055 West Georgia Street Ottawa, Ontario K1P 1C3 Vancouver, B.C. V6E 3R3 Tel: (613) 786-0107 Tel: (604) 641-4874 Fax: (613) 788-3500 Fax: (604) 646-2517 E-mail: [email protected] E-mail: [email protected]

British Columbia Hydro and Power Authority, Agent for British Columbia Hydro and Appellant Power Authority

Chris W. Sanderson, Q.C. Pierre Landry Keith B. Bergner Noel & Associes Amanda M. Kemshaw 111 rue Champlain Lawson Lundell LLP Gatineau, Quebec J9X 3R1 1600-925 West Georgia Street Tel: (819) 771-7393 Vancouver, B.C. V6C 3L2 Fax: (819) 771-5397 Tel: (604) 685-3456 Fax: (604) 669-1620 E-mail: [email protected]

Carrier Sekani Tribal Council, Respondent Agent for the Respondent

Gregory J. McDade, Q.C. Jeffrey W. Beedell Ratcliff & Company LLP Lang Michener LLP 500-221 West Esplanade 300-50 O’Connor Street North Vancouver, B.C. V7M 3J3 Ottawa, Ontario K1P 6L2 Tel: 604 988-5201 Tel: (613) 232-7171 Fax: 604 988-1452 Fax: (613) 231-3191 E-mail: [email protected] E-mail: [email protected]

The British Columbia Utilities Commission, Agent for the Intervener Intervener

Gordon A. Fulton, Q.C. Patricia J. Wilson Boughton Law Corp. Osler, Hoskin & Harcourt LLP 1000-595 Burrard Street 1900-340 Albert Street Vancouver, B.C. V7X 1S8 Ottawa, Ontario K1R 7Y6 Tel: (604) 647-4104 Tel: (613) 787-1009 Fax: (604) 683-5317 Fax: (613) 235-2867 E-mail: [email protected] E-mail: [email protected]

TABLE OF CONTENTS

PART I: STATEMENT OF FACTS...... 1

A. Rio Tinto Alcan Inc.’s Position...... 1

B. The Facts...... 3

(1) The 2007 Electricity Purchase Agreement ...... 3

(2) BC Hydro and its Decision to Form the 2007 EPA with Alcan ...... 4

(3) Alcan’s Power Generation Operations...... 5

(4) The Scoping Order...... 6

(5) The Tribal Council’s Application for Reconsideration ...... 8

(6) The Findings of Fact Relating to Water Levels and Water Flows...... 9

(7) The Decisions of the Commission that are at Issue ...... 11

C. The Judgment of the Court of Appeal ...... 13

PART II: QUESTIONS IN ISSUE...... 15

PART III: ARGUMENT...... 17

A. The Honour of the Crown does not Impose a “Duty to Decide”...... 18

B. “Acceptance” of the 2007 EPA was not Unconstitutional ...... 25

C. The Commission’s Approach to the “Public Interest” was Reasonable ...... 32

D. The Consultation Issue was in any Event Correctly Decided...... 35

E. The Commission’s Assessment was not “Preliminary” ...... 39

PART IV: SUBMISSIONS REGARDING COSTS...... 40

PART V: ORDER SOUGHT...... 40

PART VI: TABLE OF AUTHORITIES...... 41

PART VII: STATUTORY PROVISIONS IN ISSUE...... 44

PART I: STATEMENT OF FACTS

A. Rio Tinto Alcan Inc.’s Position

1. This appeal arises out of the developing jurisprudence governing the Crown’s duties to First Nations whose claims have not yet been proven in a court of law. The problem here is one that was left unresolved by this Court’s groundbreaking judgment in Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73, [2004] 3 S.C.R. 511, Tab 10,1 and consists first and foremost of determining the way in which independent and impartial tribunals, exercising an adjudicative function defined by statute, share in the duties that Haida Nation declared.

2. The respondent, the Carrier Sekani Tribal Council, claimed that the appellant British Columbia Hydro and Power Authority (“BC Hydro”), a Crown agent, owed and breached a duty to consult the Tribal Council’s member bands with respect to BC Hydro’s purchase of power from the appellant Rio Tinto Alcan Inc. (“Alcan”).2 Unlike this Court’s previous consultation cases, here the Tribal Council chose to litigate its consultation claim not before a court, but before a quasi-judicial tribunal, the British Columbia Utilities Commission.

3. Early in its proceedings, the Commission ruled that issues relating to the duty to consult First Nations would not be determinative of its analysis. In a motion for reconsideration of that ruling, the Tribal Council argued that because the power sales contract was made in breach of the duty to consult, it would be jurisdictional error for the Commission to accept the power sale contract. The Commission investigated the issue and concluded that it was not at risk of jurisdictional error because, on the facts, the duty to consult was not triggered.

4. The Court of Appeal for British Columbia allowed the Tribal Council’s appeal. The court hinged its analysis on the creation of a novel constitutional principle for cases in which a First Nation wishes to raise before a tribunal an issue about whether the Crown has discharged its duty to consult aboriginal peoples. The honour of the Crown, the Court of Appeal said, requires that a regulatory tribunal “decide any consultation dispute which arises within the scheme of its

1 All tab references are to Rio Tinto Alcan Inc.’s book of authorities. 2 At the time the contract was formed, the appellant was known as Alcan Inc. On November 8, 2007, all of the common shares in Alcan Inc. were acquired by Rio Tinto Holding Canada Inc. The two companies then amalgamated, creating the new entity Rio Tinto Alcan Inc.

regulation” (para. 54). No case had said that until this one. Applying that principle to the circumstances of this case, the court below concluded that the issue of whether the Crown owed a duty to consult was an issue that arose within the Commission’s regulatory responsibility, and therefore had to be adjudicated by the Commission. Since the Court of Appeal took the view that the Commission resolved the issue as a “preliminary” matter rather than on a “hearing of the merits” (see paras. 61 and 65), the court set aside two interconnected decisions of the Commission, and remitted the case.

5. The Commission’s decisions should be restored. There is a principled way in which the duty to consult can fit together with the work of independent, quasi-judicial tribunals. Once this principled approach is appreciated, it becomes clear that there is no reason to set the Commission’s decisions aside. This is so even if the contract required consultation. That is the first and main submission that this factum will develop.

6. In short, the reasons are these. The honour of the Crown does not require tribunals to decide consultation disputes, ever. The “duty to decide” propounded by the Court of Appeal is without support in the jurisprudence or in principle. Instead, this Court’s cases say that tribunals are only obliged to decide the questions that Parliament and the legislatures have obliged them to decide.

7. Nor can it be said that the Commission’s decision itself required consultation. A careful review of the facts of this case and the nature of the Commission’s decision makes it apparent that any infringement of the rights claimed by the Tribal Council’s members was brought about by BC Hydro’s decision to enter into the contract, not the Commission’s decision to accept the contract.

8. Finally, it was perfectly reasonable for the Commission, an expert and specialized tribunal, to conclude that the consultation issue raised by the Tribal Council was of limited relevance to its evaluation of the contract. The Legislature expressly gave the Commission the discretion to decide what it considers to be relevant to its inquiry. In the same subsection, the Legislature required the Commission to consider the price of the energy and the reliability of supply, suggesting that the Commission’s inquiry was intended to ensure that public utilities do not form contracts that will impair their ability to provide affordable and high-quality service to

ratepayers. It was open to the Commission to direct its analysis accordingly, by focussing on the interests of ratepayers.

9. Moreover, there is an alternative basis on which the Court of Appeal’s judgment ought, with respect, to be reversed. The court mischaracterized the extent to which the Commission did, in fact, decide the consultation issue raised by the Tribal Council. The Tribal Council was permitted to file evidence on the effects of the contract, and to cross-examine the witnesses of BC Hydro and Alcan. Written and oral submissions were received. The Commission made findings of fact to the effect that BC Hydro’s purchase of power would make no difference to the bodies of water from which the power would be generated. The Commission correctly applied the principles set out in Haida Nation to those facts. There was no foundation for the Court of Appeal’s charge that the Commission’s inquiry into the consultation issue was inadequate, on either substantive or procedural grounds.

10. For these reasons and those that follow, the appeal should be allowed, and the Commission’s decisions restored.

B. The Facts

(1) The 2007 Electricity Purchase Agreement

11. On August 13, 2007, BC Hydro and Alcan entered into the 2007 Electricity Purchase Agreement (the “2007 EPA”).3 The 2007 EPA is an “energy supply contract” under s. 68 of the Utilities Commission Act, R.S.B.C. 1996, c. 473. Under the agreement, Alcan will sell BC Hydro electricity generated at its facilities in northwestern British Columbia, until December 31, 2034.4

12. The formation of the 2007 EPA triggered s-s. 71(1) of that statute, which provided that a person who enters into an “energy supply contract” must file it with the Commission.5 Under s-

3 Commission Decision, p. 4; Joint Record of the Appellants (“Record”), Vol. I, p. 17 4 Commission Decision, p. 6; Record, Vol. I, p. 19 5 Section 71 has been amended since the Commission proceedings were concluded: see s. 14 of the Utilities Commission Amendment Act, 2008, S.B.C. 2008, c. 13, Tab 30. The amendments are inconsequential to this case. While Donald J.A. referred in his reasons to the amended legislation (see para. 24), references in this factum will be to the version that was in place at the relevant time.

s. 71(1), the Commission has no obligation to hold a hearing or otherwise inquire with respect to an energy supply contract; the only fixed requirement is that the contract be filed.

(2) BC Hydro and its Decision to Form the 2007 EPA with Alcan

13. BC Hydro is a public utility and a corporation continued pursuant to the Hydro and Power Authority Act, R.S.B.C. 1996, c. 212. According to that statute, BC Hydro’s powers include the generation of power, the development of power projects and plants, and the purchase and sale of power (see s. 12(1)(a), (b), and (m)).6 Most residents and businesses in British Columbia purchase their electricity from BC Hydro. In this case, however, BC Hydro was the purchaser rather than the seller of power.

14. Within its prescribed purposes, BC Hydro has the power to contract like any other legal person. The 2007 EPA became effective on October 1, 2007, months before the Commission’s proceedings had been concluded.7

15. The 2007 EPA reflects a strategic decision on the part of BC Hydro to acquire power from a reliable and cost-effective source in order to continue to be able to deliver power to ratepayers at reasonable rates. BC Hydro’s report to the Commission highlights the context created by BC Hydro’s energy requirements:

The 2007 EPA must be considered in the context of BC Hydro’s identified need for additional capacity and energy resources in light of currently anticipated demand growth and alternative resource availability.8

16. BC Hydro is “for all its purposes an agent of the government” (see s. 3 of the Hydro and Power Authority Act), meaning that when BC Hydro carries on its business it does so on behalf of Her Majesty the Queen in Right of British Columbia.

17. Alcan, by contrast, is a private corporation.

6 Section 12 makes these powers “[s]ubject to the approval of the Lieutenant Governor in Council”. A blanket authorization for BC Hydro’s operations was granted by Order-in-Council dated July 30, 1965, Tab 33, pursuant to the predecessor provision to s. 12. The power to grant an authorization in general terms was confirmed by s. 7 of the Power Measures Act, 1966, S.B.C. 1966, c. 38, Tab 29. 7 Commission Decision, p. 6; Record, Vol. I, p. 19 8 Record, Vol. V, p. 182. See also Commission Decision, p. 26; Record, Vol. I, p. 39

(3) Alcan’s Power Generation Operations

18. Alcan has carried on aluminum smelting and associated hydroelectric activities in British Columbia since the 1950s. In its decision accepting the 2007 EPA, the Commission set out a number of background facts about Alcan’s operations in British Columbia.9 Some of these facts have also been judicially recorded: see District of Kitimat and Wozney v. Minister of Energy and Mines et al, 2007 BCSC 429, Tab 6, aff’d 2008 BCCA 81, 77 B.C.L.R. (4th) 297, Tab 7, and United Fisherman and Allied Workers’ Union v. British Columbia (Ministry of Energy), [1994] B.C.J. No. 2839 (S.C.), Tab 24. The history of Alcan’s role in the British Columbia economy need not be exhaustively recounted here. The salient points are as follows.

19. In the years following the Second World War, demand for aluminum was high: District of Kitimat, at para. 14. With the support and encouragement of the government of British Columbia and its Legislature, Alcan decided to construct aluminum smelting and hydroelectric generation facilities in the vicinity of what is now Kitimat, B.C.: District of Kitimat, at para. 1. Hutchison J. of the Supreme Court of British Columbia described the project as follows, at para. 11 of United Fisherman:

In simple terms, the project entailed the damming of the Nechako River, diverting its stored water westward, by tunnel through 10 miles of the Coast Range through turbines to generate electricity before entering the Kemano River and hence, to tide water. The total project, as envisaged from the outset, included the Nechako Reservoir created by the Kenney Dam and a number of smaller saddle dams, two tunnels from Tahtsa Lake and a duplicate system of penstocks leading to a powerhouse housing 16 generators at Kemano, and a twinned transmission line between Kemano and Kitimat. […] The resulting power was then to be transmitted to Kitimat where Alcan planned an aluminum smelter.10

20. By agreement with the government, made in 1950, Alcan was guaranteed access to the public water resources it needed to generate the electricity that was, in turn, needed for aluminum smelting: District of Kitimat, at paras. 1, 15. Brenner C.J.S.C. described this

9 Commission Decision, pp. 1-4, 32-37; Record, Vol. I, pp. 14-17, 45-50 10 See also Commission Decision, p. 32; Record, Vol. I, p. 45

arrangement, in which the government traded access to natural resources for a massive private investment in local industry, as an exercise in nation-building: District of Kitimat, at para. 21.

21. From 1950 to 1954, Alcan constructed its facilities, including the Kemano Powerhouse, the Kenney Dam, and the resulting Nechako Reservoir.11 To this day, Alcan remains the sole owner of the Kemano system.12

22. Alcan derives its authority to divert and use water for power production from its Final Water License No. 102324, which, as Donald J.A. noted, gives Alcan use of the water on a permanent basis.13 Pursuant to the 1987 Settlement Agreement among Alcan, the Province of British Columbia, and Canada, Alcan is committed to the release of certain amounts of water into Nechako River, via the Skins Lake Spillway, for fisheries purposes.14

23. The hydroelectric power generated by Alcan has primarily been used in its smelter. Since 1961, however, Alcan has sold its excess power to BC Hydro (or its subsidiary, Powerex), first for use in the area surrounding Kitimat, and later for transmission to BC Hydro to serve neighbouring communities in northwest British Columbia.15 The 2007 EPA is the latest in the series of power sales from Alcan to BC Hydro that have taken place in the decades since.

(4) The Scoping Order

24. BC Hydro filed the 2007 EPA on September 5, 2007.16 The Commission then held two procedural conferences, on September 26 and October 5, to determine the “scope” of its hearing (among other matters).17 In this case,18 “scoping” is the process by which the Commission

11 Commission Decision, p. 1; Record, Vol. I, p. 14 12 Commission Decision, p. 3; Record, Vol. I, p. 16 13 Commission Decision, p. 2; Record, Vol. I, p. 15. See also Court of Appeal Decision, para. 19. 14 Commission Decision, pp. 2, 33; Record, Vol. I, pp. 15, 46. The 1987 Settlement Agreement settled litigation among Alcan and both levels of government over water flows into the Nechako River: see District of Kitimat, at paras. 30-31. 15 Commission Decision, p. 3; Record, Vol. I, p. 16 16 Commission Decision, p. 4; Record, Vol. I, p. 17 17 Commission Decision, pp. 6-7; Record, Vol. I, pp. 19-20 18 “Scoping” is a common term in the regulatory context, but the nature of the process will vary depending on the nature of the enabling statute: see, for instance, MiningWatch Canada v. Canada (Fisheries and Oceans), 2010 SCC 2, at paras. 35-38.

determines, pursuant to s. 71(1)(b), what “information it considers necessary to determine whether the contract is in the public interest.”

25. A number of questions arose at that stage, of which the role of First Nations issues in the proceedings was one. Before the Commission at that stage of the proceedings was the Haisla Nation.19 The Tribal Council was not yet a party. The Haisla Nation advised the Commission through its counsel that it “does not ask the Commission to assess the adequacy of consultation and accommodation afforded to the Haisla Nation by BC Hydro on the 2007 EPA”.20 The Haisla said they intended to “pursue alternative avenues to address BC Hydro’s [alleged] failure”.21

26. The Commission issued its scoping decision on October 10, ruling to “limit the scope of the oral hearing to cost-effectiveness”.22 Cost-effectiveness was a test that the Commission had used in a number of recent decisions, and included consideration of “reliability, safety, schedule, financing arrangements and other factors” that would “have ratepayer impacts”.23

27. It followed that the duty of the Crown to consult First Nations was not within the scope of the proceedings, because the Commission did not consider it to be relevant.24 However, the Commission allowed consideration of the consultation issue from the following perspective:

Evidence relevant to First Nations consultation may be relevant for the same purpose that the Commission often considers evidence of consultation with other stakeholders. Generally, insufficient evidence of consultation, including with First Nations is not determinative of matters before the Commission.25

19 The Haisla Hereditary Chiefs also intervened, but by letter dated October 2, 2007, the Hereditary Chiefs withdrew their request for intervenor status on the ground that the Haisla Nation spoke for all Haisla. See the Commission’s scoping decision, p. 5; Record, Vol. II, p. 50. 20 Scoping Decision, p. 4; Record, Vol. II, p. 49, quoting from Exhibit C3-4, at Record, Vol. VII, p. 155 21 Exhibit C3-4; Record, Vol. VII, p. 163 22 Scoping Decision, p. 5; Record, Vol. II, p. 50 23 Scoping Decision, p. 2; Record, Vol. II, p. 47 24 Scoping Decision, p. 5; Record, Vol. II, p. 50 25 Ibid.

(5) The Tribal Council’s Application for Reconsideration

28. On October 29, 2007, the Tribal Council requested late intervenor status.26 The Tribal Council advised the Commission that it represents several First Nations downstream of Alcan’s hydro-electric operations (i.e., on the Nechako River system), each of which have claimed aboriginal title and rights.27

29. At the commencement of the oral hearing, on November 19, 2007, the Tribal Council brought a motion for reconsideration of the scoping order.28 In its written submissions, filed November 20, the Tribal Council asked the Commission to treat as within the scope of its hearing the issue of whether the duty to consult was met with respect to the 2007 EPA, along with related issues about whether the 2007 EPA would bring about a further infringement, or would affect the diversion or storage of water.29

30. The Commission has a two phase process for reconsidering its decisions. In Phase I the Commission considers whether a prima facie case for reconsideration has been shown. If the applicant crosses that threshold, in Phase II the Commission considers the application on its merits, with the benefit of whatever evidence and argument is necessary to make that determination.30

31. At the outset of the second day of the hearing (November 21), the Commission advised the parties of its conclusion that the Tribal Council had established a prima facie case for reconsideration of the scoping order, on the following ground:

The determination of the Commission is an error of law going to jurisdiction (absent consent from all other affected First Nations).31

The Commission then established a process by which it would resolve this jurisdictional issue.32

26 Commission Decision, p. 9; Record, Vol. I, p. 22 27 Exhibit C21-1; Record, Vol. VII, p. 165 28 Commission Decision, p. 9; Record, Vol. I, p. 22 29 Motion for Reconsideration; Record, Vol. II, p. 51 30 Commission Decision, p. 9; Record, Vol. I, p. 22 31 Ibid. 32 Commission Decision, pp. 9-10; Record, Vol. I, pp. 22-23

32. Notwithstanding the late stage at which the Tribal Council’s request came, the record discloses that the Commission took care to afford the Tribal Council full procedural rights. What the Court of Appeal would later characterize as a “preliminary” or “threshold” inquiry rather than a “full” “hearing of the merits” (paras. 61 and 65) was in fact an extensive and careful adjudicative process, focussing on whether, in the language of Haida Nation, at para. 35, the 2007 EPA was “conduct that might adversely affect” aboriginal rights.

33. As part of this process, counsel for the Tribal Council was permitted to file evidence and call witnesses, and to cross-examine the witnesses of BC Hydro and Alcan, on the issue of whether, as the Tribal Council alleged, the 2007 EPA would bring about a change in water flows into the Nechako River, or a change in water levels of the Nechako Reservoir.33 Cross- examination was not confined to matters of water; counsel was permitted to ask questions about any impact arising from the 2007 EPA, including questions about economic incentives created by the contract, and changes in management or control of infrastructure or resources. Then, on November 27, the Commission heard argument from the parties about whether, in light of the evidence, the Commission ought to find that the EPA had an impact on water flows or water levels.

(6) The Findings of Fact Relating to Water Levels and Water Flows

34. On November 29, 2007, in a decision called “Impacts on Water Flows”, the Commission made a number of important findings of fact about the effects of the 2007 EPA – or, more accurately, the lack thereof.

35. The Commission accepted the evidence given by panels of witnesses tendered by Alcan and BC Hydro, because it was “consistent and not contradicted”.34 The Commission thus found that “responsibility for operation of the Nechako Reservoir remains with Alcan under the 2007 EPA”, and that “the 2007 EPA sets the priority of generation produced but does not set the priority for water.”35 In effect, the 2007 EPA determines the allocation of the power generated

33 Impacts on Water Flows, p. 1; Record, Vol. II, p. 115. See also Transcripts, at Record, Vol. III, pp. 139-end, and Vol. IV, pp. 1-15, 18-101. 34 Impacts on Water Flows, p. 3; Record, Vol. II, p. 117 35 Impacts on Water Flows, p. 2; Record, Vol. II, p. 116

by Alcan; it does not determine how much water will be used to generate power in the first place. With or without the 2007 EPA, “Alcan operates the Nechako Reservoir to optimize power generation”.36

36. So far as fisheries conservation is concerned, “the priority of releases from the Nechako Reservoir is first to fish flows and second to power service”, meaning that “the obligation to release flows into the Nechako River [as a result of regulatory requirements and the 1987 Settlement Agreement; see “Alcan’s Power Generation Operations”, above] will be met in exactly the same way after the effective date of the 2007 EPA as before”.37 While the timing of releases from the Nechako Reservoir for power generation purposes may change as a result of the 2007 EPA, that change “will have no impact on the releases into the Nechako river system”.38 That is because water releases for power generation flow not into the Nechako system (to the east), with which the Tribal Council is concerned, but instead flow through the Tahtsa Intake into the Kemano River (to the west).39

37. Nor will the 2007 EPA bring about a change in control over water flows or water levels. The Commission rejected the Tribal Council’s argument that the 2007 EPA would alter the management structure of the reservoir. Rather, the Joint Operating Committee created by the contract “is limited to information exchange and does not change the operating responsibility for the reservoir”.40

38. The water flows decision concluded with three further findings that built on the findings recited above:

36 Ibid. 37 Impacts on Water Flows, p. 2; Record, Vol. II, p. 116 38 Impacts on Water Flows, p. 3; Record, Vol. II, p. 117 39 See p. 2 of Impacts on Water Flows. There are two mechanisms by which Alcan can release water from the Nechako Reservoir, each of which have different purposes. The first is into the Skins Lake Spillway, from which water flows into Skins Lake, downstream of which is the Cheslatta River system. The Cheslatta in turn flows into the Nechako River. The Skins Lake Spillway is the main mode of release, and serves both to maintain an appropriate level of water in the reservoir, and to meet various regulatory obligations related to fisheries. The second method of release is through the Tahtsa Intake, which flows down a 16 km power tunnel to the Kemano Powerhouse. There the water pushes eight turbine generators to create Alcan’s electricity supply. See Commission Decision, p. 35; Record, Vol. I, p. 48. 40 Impacts on Water Flows, p. 3; Record, Vol. II, p. 117

a) the 2007 EPA will have no impact on the volume, timing or source of water flows into the Nechako River;

b) the 2007 EPA will not change the volume of water to be released into the Kemano River; and

c) the 2007 EPA may cause reservoir elevations to vary approximately one or two inches which will be an imperceptible change in the water levels of the Kemano Reservoir. [The change is “imperceptible” because Alcan has historically operated the reservoir within a range of 13 feet.41] This change to reservoir levels will not affect water flows other than the timing of releases to the Kemano River.42

39. Having made these findings, the Commission then invited the parties to make written submissions on the reconsideration application – i.e., on the question of whether it would be jurisdictional error, on these facts, not to revise the scoping order to encompass consultation.43 The parties did so.

(7) The Decisions of the Commission that are at Issue

40. On December 17, 2007, the Commission dismissed the application for reconsideration of its scoping order, with reasons to follow.

41. In a lengthy written decision released January 29, 2008, the Commission gave its reasons for dismissing the reconsideration application,44 and its reasons why it concluded that the 2007 EPA is in the public interest for purposes of s. 71.

42. For purposes of resolving the jurisdictional issue posed in the reconsideration application, the Commission assumed the truth of the historical infringement of aboriginal rights alleged by the Tribal Council – in particular, that the Tribal Council’s members hold aboriginal title and rights in an area affected by Alcan’s reservoir operations and its use and diversion of water for power production; that those operations have adverse effects on the aboriginal rights and title of

41 Impacts on Water Flows, p. 2; Record, Vol. II, p. 116. This is permitted by Alcan’s water licence, which creates a licenced operating drawdown range of 30 feet: see Exhibit B2-1, at Record, Vol. VII, pp. 79-80. 42 Impacts on Water Flows, p. 4; Record, Vol. II, p. 118 43 Commission Decision, p. 10; Record, Vol. I, p. 23 44 See Commission Decision, pp. 117-125; Record, Vol. I, pp. 130-138.

the Tribal Council’s members; and that the members have never been consulted with respect to these infringements.45

43. The Commission asked itself:

Assuming there has been a historical, continuing infringement of aboriginal title and rights and assuming there has been no consultation or accommodation with [the Tribal Council] on either the historical, continuing infringement or the 2007 EPA, would it be a jurisdictional error for the Commission to accept the 2007 EPA?46

44. The Commission concluded that on the facts of this case, no jurisdictional error would result from accepting the 2007 EPA. The Commission discussed a number of consultation cases, including Haida Nation, and concluded that the Tribal Council had to show “more than just an underlying infringement”. The Commission considered the authorities to require that “[a]cceptance of the 2007 EPA must have no ‘adverse effects’ and must be ‘neutral from a practical point of view’”.47 Applying this standard, the Commission concluded that its findings of fact that there would be no new physical impacts, together with the fact that a decision under s. 71 “does not approve, transfer or change control of licenses or authorization”,48 meant that there were no adverse effects arising from the Commission’s decision, and that accepting the 2007 EPA was neutral from a practical point of view.

45. Having found that the duty to consult was not triggered, the Commission reasoned that there could be no jurisdictional error in accepting the 2007 EPA.49 The conclusion that there would be no jurisdictional error supported the Commission’s earlier conclusion, in its scoping order, that evidence relating to consultation would only be relevant insofar as “the Commission often considers evidence of consultation with other stakeholders”. The Commission expressed these findings this way:

45 Commission Decision, p. 117; Record, Vol. I, p. 130 46 Commission Decision, p. 118; Record, Vol. I, p. 131 47 Commission Decision, p. 121; Record, Vol. I, p. 134 48 Commission Decision, p. 122; Record, Vol. I, p. 135 49 Ibid.

Evidence regarding the duty to consult for the historical, continuing infringement is not relevant because there is no obligation on the Commission to consider the adequacy of consultation regarding the historical, continuing infringement. Moreover, the 2007 EPA does not give rise to a duty to consult because of the factual determinations set forth in Letter No. L-95- 07 [i.e., the impacts on water flows decision]. […] In the circumstances of this review, evidence regarding consultation with respect to the historical, continuing infringement can reasonably be expected to be of no assistance for the same reasons there is no jurisdictional error, that is, the limited scope of the section 71 review, and there are no new physical impacts.50

46. Having satisfied itself that acceptance of the contract would not amount to jurisdictional error, the Commission ordered that the contract be accepted.51 The Commission found that “the 2007 EPA is cost-effective, and is in the public interest”.52

47. It was from these two decisions – i.e., the decision to dismiss the reconsideration application, and the decision to accept the 2007 EPA – that the Tribal Council sought and obtained leave to appeal to the Court of Appeal, as required by s. 101 of the Utilities Commission Act: see The Carrier Sekani Tribal Council v. The B.C. Utilities Commission, 2008 BCCA 385 (in Chambers).53

C. The Judgment of the Court of Appeal

48. Speaking through Donald J.A., the Court of Appeal unanimously concluded that the Tribal Council’s appeal should be allowed. The court raised sua sponte a new constitutional principle – the “duty to decide” – that was determinative of the case.

49. Donald J.A. developed the proposition that the Commission was obliged to decide the consultation issue as follows. First, Donald J.A. found that the Commission had the authority to decide questions of law (para. 40). On the basis of this Court’s decision in Paul v. British Columbia (Forest Appeals Commission), 2003 SCC 55, [2003] 2 S.C.R. 585, Tab 17, it followed,

50 Commission Decision, pp. 123-124; Record, Vol. I, pp. 136-137 51 Order of the Commission; Record, Vol. I, pp. 6-7 52 Commission Decision, p. 126; Record, Vol. I, p. 139 53 Record, Vol. II, p. 140 et seq.

14 in his view, that “[t]he Commission is therefore presumed to have the jurisdiction to decide relevant constitutional questions, including whether the Crown has a duty to consult and whether it has fulfilled the duty” (para. 41). Moreover, Donald J.A. thought that the consultation issue was inextricable from the “public interest” inquiry with which the Commission was tasked. As he put it:

How can a contract formed by a Crown agent [i.e., BC Hydro] in breach of a constitutional duty be in the public interest? The existence of such a duty and the allegation of the breach must form part and parcel of the public interest inquiry. [para. 42]

50. Donald J.A.’s next step was to conclude that “the honour of the Crown obliges [the Commission] to do so [i.e., to decide the consultation issue]” (para. 51). He noted that this Court’s consultation jurisprudence “requires discussion at an early stage of a government plan that may impact Aboriginal interests” (para. 52), and said that “it logically follows that the tribunal with the power to approve the plan must accept the responsibility to assess the adequacy of consultation” (para. 53). Were it otherwise, in his view, First Nations would be “driven to seek an interlocutory injunction, which according to Haida […] is often an unsatisfactory route” (para. 53). In short:

The honour of the Crown requires not only that the Crown actor consult, but also that the regulatory tribunal decide any consultation dispute that arises within the scheme of its regulation. [para. 54; emphasis added]

51. Applying that theory of the law to the Commission’s decision, Donald J.A. was of the view that the Commission’s approach was unreasonable (para. 60). In his view:

the Commission wrongly decided something as a preliminary matter which properly belonged in a hearing of the merits. The logic flaw was in predicting that consultation could have produced no useful outcome. Put another way, the Commission required a demonstration that the appellant would win the point as a precondition for a hearing into the very same point.

I do not say that the Commission would be bound to find a duty to consult here. The fault in the Commission’s decision is in not entertaining the issue of consultation within the scope of a full

hearing when the circumstances demanded an inquiry. [paras. 61- 62]

52. The Court of Appeal therefore remitted the case back to the Commission, for “evidence and argument on whether a duty to consult and, if necessary, accommodate the appellant exists and, if so, whether the duty has been met in respect of the filing of the 2007 EPA” (para. 69).

PART II: QUESTIONS IN ISSUE

53. The issues in this case are not limited to the grounds on which the Court of Appeal decided to vacate the Commission’s decisions. At various points in the proceedings, and with various degrees of emphasis, three distinct lines of attack have been levelled at the Commission, each of which raises its own issues.

54. The first is that of the Court of Appeal, which turns on the proposition that the honour of the Crown requires administrative tribunals to decide any dispute about the Crown’s duty to consult First Nations that “arises within the scheme of [their] regulation”.

55. The second is that put forward by the Tribal Council in the court below. The Tribal Council argued that the 2007 EPA required consultation, because it “perpetuated historical infringements”, and brought about “non-physical impacts” on the rights of its members. The Tribal Council then argued that the Commission’s decision approves the 2007 EPA, just as the Minister of Forests approved the renewal of Weyerhauser’s tree farm licence in Haida Nation. To the Tribal Council, it made no difference that the Commission is a quasi-judicial tribunal, except insofar as that means the Commission will not itself be expected to consult (see also Donald J.A.’s reasons, at para. 56). It follows, the Tribal Council said, that the Commission could not approve the 2007 EPA unless adequate consultation had occurred.

56. The third and final ground on which the Commission was impugned was suggested in the Tribal Council’s motion for reconsideration, and embraced in this passage of Donald J.A.’s judgment:

How can a contract formed by a Crown agent in breach of a constitutional duty be in the public interest? The existence of such

a duty and the allegation of the breach must form part and parcel of the public interest inquiry. [para. 42]

Unlike the first two arguments, this point operates within the statutory scheme created by the Utilities Commission Act. The argument goes that the Commission’s “public interest” jurisdiction necessarily encompasses an inquiry into constitutional questions relating to the subject matter before the Commission. The scoping order is said to be unreasonable insofar as it is based on the proposition that consultation is of limited relevance to the public interest.

57. These three arguments call upon this Court to consider the way in which independent and impartial tribunals, exercising an adjudicative function defined by statute, engage with the duties set out in Haida Nation.

58. The first and main submission that will be made in this factum is that, in this case, it was reasonable and constitutional for the Commission to conclude that in the exercise of its jurisdiction under s. 71, the consultation issue raised by the Tribal Council was of limited relevance to its inquiry. If that is right, then it does not matter whether BC Hydro’s decision to enter into the 2007 EPA required consultation.

59. Three issues thus arise:

A. does the honour of the Crown impose on tribunals a “duty to decide” consultation questions, as the Court of Appeal concluded?

B. can a decision by the Commission to “accept” an energy supply contract under s. 71 of the Utilities Commission Act trigger the duty to consult? and

C. is it unreasonable for the Commission to focus its inquiry on cost-effectiveness, in the course of a s. 71 review?

If the answer to all three questions is “no”, the appeal should be allowed.

60. In the alternative, this factum will demonstrate that the Commission correctly concluded that the 2007 EPA did not require consultation, and that the Commission arrived at that result by way of a fair process. Even if the Commission had a constitutional or administrative law

obligation to resolve the consultation issue, or was otherwise constitutionally incapable of accepting a contract made in breach of the duty to consult, the fact is that the Commission properly resolved the Tribal Council’s claim.

61. The final issues, arising only in the alternative, are therefore as follows:

D. did the Commission correctly conclude that the 2007 EPA did not trigger the duty to consult described in Haida Nation? and

E. did the Commission decide the consultation issue by way of a fair and adequate process?

If the answer to these questions is “yes”, the appeal should be allowed, regardless of the Court’s answers to the questions posed in “A” to “C”.

PART III: ARGUMENT

62. It has been the law since at least Slaight Communications Inc. v. Davidson, [1989] 1 S.C.R. 1038, Tab 22, that a tribunal’s decision may be challenged on either constitutional or administrative law grounds (see p. 1074 et seq., per Lamer J.). A tribunal will exceed its jurisdiction when its order violates the Constitution, as every grant of statutory authority is impliedly limited by the Constitution. Absent a constitutional (or other jurisdictional) defect, a tribunal’s order may nonetheless be set aside if it is shown that the tribunal’s line of analysis was unreasonable, according to the principles recently reformulated in Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, Tab 8.

63. This Part will show that there was no constitutional defect in the Commission’s decision to accept the 2007 EPA, nor was the Commission’s approach unreasonable. This Part will make that showing by way of three points, corresponding to the first three issues outlined above:

A. Neither the honour of the Crown nor any other constitutional principle imposes on tribunals the obligation to decide consultation questions. Quite the contrary: the cases considering the power of administrative tribunals to resolve constitutional issues, including the leading case of Nova Scotia (Workers’ Compensation Board) v. Martin; Nova Scotia (Workers’ Compensation Board) v. Laseur, 2003 SCC 54, [2003] 2 S.C.R. 504, Tab 16 (“Martin & Laseur”), have never departed from the

basic principle that the adjudicative responsibilities of administrative tribunals are determined by the Legislature, and the Legislature alone.

B. Haida Nation requires consultation only where “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” (para. 35). Neither the Commission’s adjudicative process nor its ultimate order to accept the 2007 EPA adversely affects the rights claimed by the Tribal Council. If any infringement took place, it was brought about not by the Commission, but by BC Hydro’s decision on behalf of the Crown.

C. The Legislature directed the Commission to consider four essentially economic factors in the course of a s. 71 review, but gave it the residual discretion to weigh additional factors that “the commission considers relevant”. Here, the Commission chose to centre its inquiry on cost-effectiveness, and therefore was not prepared to treat consultation as a determinative factor. Given the nature of the Commission’s expertise and the economic focus suggested by the factors set out in s. 71, the Commission’s approach was within the range of interpretive options available to the Commission, on a reasonableness standard of review.

64. In the alternative, two further points will show that the Commission correctly and fairly disposed of the Tribal Council’s claim that the 2007 EPA breached the duty to consult:

D. The Commission was right to find that in the absence of any significant effect on water levels or water flows, there was no potential for adverse effects on the rights claimed by the Tribal Council. On a straightforward application of Haida Nation to the facts found by the Commission, there was no need for consultation with respect to the 2007 EPA.

E. The Tribal Council were given ample opportunity to prove the facts they alleged, and make legal argument based on those facts. It cannot be suggested that the Commission failed to discharge any obligation to resolve the consultation question.

A. The Honour of the Crown does not Impose a “Duty to Decide”

65. The honour of the Crown does not conscript administrative tribunals into adjudicating consultation claims.

66. The honour of the Crown “gives rise to different duties in different circumstances”: Haida Nation, at para. 18. When, for instance, the Crown asserts discretionary control over aboriginal interests, the Crown will owe First Nations a fiduciary duty: Haida Nation, at para.

18, following Wewaykum Indian Band v. Canada, 2002 SCC 79, [2002] 4 S.C.R. 245, Tab 26, at para. 79. And “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”, the Crown will owe a duty to consult: Haida Nation, at para. 35.

67. To these two duties the Court of Appeal has purported to add a third – a duty imposed on administrative tribunals, to resolve in the course of their adjudicative functions whether the Crown owes and has breached the duty to consult. Is this what the honour of the Crown requires? The answer should be “no”.

68. One of these duties is not like the others. Whereas the duty to consult and the fiduciary duty are both anchored in long-held principles of aboriginal law (and indeed the latter duty predates s. 35), the duty to decide was invented by Donald J.A. in this very case.

69. The fiduciary duty was given life in the aboriginal context as far back as Guerin v. The Queen, [1984] 2 S.C.R. 335, Tab 9, and was said then to flow both from the sui generis relationship between the Crown and First Nations, and from the basic principle of equity that a fiduciary obligation will exist whenever one person undertakes to act for the benefit of another (pp. 384-385). Similarly, the duty to consult has been recognized in our law since the groundbreaking decision of this Court in R. v. Sparrow, [1990] 1 S.C.R. 1010, Tab 20, when Dickson C.J. and La Forest J. said that the degree to which government consulted with First Nations would be an important aspect of the justification analysis, where an infringement of a s. 35 right has been proven (see p. 1119). The innovation brought about by Haida Nation was in its recognition that the duty could be used to invalidate government action before actual proof of the s. 35 right. The so-called “duty to decide” has no similar pedigree – nor, as will become clear, any similar conceptual anchor.

70. This Court has consistently maintained the view that the work of administrative tribunals – even in constitutional matters – is always a matter for the Legislature to determine. This flows from the basic principle that legislative supremacy and the rule of law require an administrative decision-maker to act only within the boundaries set up by its enabling statute. As Bastarache and LeBel JJ. explained in Dunsmuir, at para. 29:

Administrative powers are exercised by decision makers according to statutory regimes that are themselves confined. A decision maker may not exercise authority not specifically assigned to him or her. By acting in the absence of legal authority, the decision maker transgresses the principle of the rule of law. Thus, when a reviewing court considers the scope of a decision-making power or the jurisdiction conferred by a statute, the standard of review analysis strives to determine what authority was intended to be given to the body in relation to the subject matter. [emphasis added; see also para. 30]

71. This is no less true where the Constitution is in play. The Legislature at all times retains control over the adjudicative powers of the tribunals it creates. Thus, where it is shown that the Legislature “clearly intended to exclude Charter issues from the tribunal’s authority” (Martin & Laseur, at para. 3), the supremacy of the Legislature dictates that its choice will be effective. Gonthier J. described the rationale for this approach in these terms:

This approach rests on the principle that, since administrative tribunals are creatures of Parliament and the legislatures, their jurisdiction must in every case “be found in a statute and must extend not only to the subject matter of the application and the parties, but also to the remedy sought”: [Douglas/Kwantlen Faculty Assn. v. Douglas College, [1990] 3 S.C.R. 570], at p. 595 […]. [para. 33; emphasis added]

72. The Constitution does indeed have an important role to play in the resolution of this case, but the honour of the Crown is not the applicable principle. Instead, it is the principle that the Legislature is supreme, and the related principle that the rule of law requires that tribunals do no more than what the Legislature has authorized. It necessarily follows that a tribunal will only have the duty to decide what a statute says it must decide. Thus, in Martin & Laseur it would have been error for the Workers’ Compensation Board to fail to consider whether the statutory provision limiting benefits for sufferers of chronic pain was constitutional, since the Board was tasked with correctly determining the benefits to which Mr. Martin and Ms. Laseur were entitled. Here, by contrast, the only question the Commission must decide (if it chooses to hold a hearing in the first place) is whether the energy supply contract is in the “public interest”, under s. 71.

73. While this Court said in Haida Nation that the “honour of the Crown is always at stake in its dealings with Aboriginal peoples” (para. 16), the adjudicative function of a quasi-judicial

21 tribunal ought not to be understood to involve a “dealing with Aboriginal peoples”. As Bastarache J. observed in Paul, “any adjudicator, whether a judge or a tribunal, does not create, amend or extinguish aboriginal rights” (para. 29). Thus has Professor Nigel Bankes suggested that the honour of the Crown can no more constrain the adjudicative function of a tribunal than it can that of the courts:

[W]hile no person is above the law and the Constitution, the courts are ultimately the supreme arbiters of what the law is and the Constitution actually mean and the Constitution needs to recognize this special role. Suppose, for example, that a Court is just about to make a decision to the effect that a treaty right was extinguished by a pre-1982 federal enactment. Does the court itself have to fulfil its own Sparrow justification tests? Does the Court have to engage in a consultation exercise before rendering its decision? The answers are clearly “no” for that would be incompatible with the judicial interpretive role and the separation of powers within a constitutional democracy. Similarly, if the Crown owes to aboriginal peoples a fiduciary duty, and implicit in the idea of a fiduciary duty is the idea of undivided loyalty (i.e., the duty to act in the best interests of the other person rather than your own interest, or indeed the interest of anybody else), it is surely self evident that such a duty could never be compatible with the judicial role. [“Regulatory Tribunals and Aboriginal Consultation,” (Spring 2003) 82 Resources 1-4, Tab 34, p. 3]

The implication for tribunals, Professor Bankes thinks, is “that certain duties cannot be expected of those who fulfill certain roles.”

74. Professor Bankes’ analysis is consistent with this Court’s pre-Haida Nation holding that the fiduciary duty owed by the Crown to aboriginals does not create “superadded” duties for quasi-judicial tribunals like the Commission: see Quebec (Attorney General) v. Canada (National Energy Board), [1994] 1 S.C.R. 159, Tab 19. In that case, Iacobucci J. held for a unanimous Court that the nature of such tribunals is “inherently inconsistent with the imposition of a relationship of utmost good faith between the Board and a party appearing before it” (p. 184). What is true of the Crown’s fiduciary duty must also be true of the honour of the Crown principle from which the fiduciary duty originates.

75. Professor David Mullan takes a different view. He has written very recently that it is “not at all clear that that holding [i.e., the holding in Quebec v. Canada] speaks to the issue

whether adjudicative tribunals and agencies are subject to the common law constitutional duty to consult” (“The Duty to Consult Aboriginal Peoples – The Canadian Example” (2009), 22 Can. J. Admin. L. & Prac. 107, Tab 35, at p. 120). Professor Mullan finds the “thrust” of Haida Nation, together with Taku River Tlingit First Nation v. British Columbia (Project Assessment Director), 2004 SCC 74, [2004] 3 S.C.R. 550, Tab 23, and Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage), 2005 SCC 69, [2005] 3 S.C.R. 388, Tab 13, to be that “the obligation is one that is impressed upon all actors throughout the decision-making process right up to the final decision-maker; be it the Cabinet, a Minister of the Crown, a departmental official, or an administrative agency or tribunal” (Mullan, at p. 120).

76. This cannot be right. On Professor Mullan’s analysis, a tribunal that is involved in “the decision-making process” (whether or not, it seems, as the ultimate decision-maker) would itself have to engage in consultation. Not even the Court of Appeal was prepared to go that far (see para. 56), and with good reason. The rationale driving this Court’s holding in Quebec v. Canada is that if the courts were to impose on tribunals a duty to one of the parties, it would fundamentally compromise the independence and impartiality that is their raison d’etre. If the honour of the Crown overlays decision-making by tribunals, the untenable result that Iacobucci J. warned against would come to pass.

77. Against all this, Donald J.A. offered two reasons for his opinion that the honour of the Crown required the Commission to address the question: first, that Haida Nation requires early consultation, and the Commission “is the only appropriate forum to decide the issue in a timely way” (paras. 51-52); and second, that if a tribunal is not obliged to decide whether consultation has been adequate, First Nations will be forced to seek injunctions, which Haida Nation said will often be unsatisfactory (para. 53).

78. As to Donald J.A.’s first point, the issue is not whether early consultation should occur. Where a duty to consult is owed, consultation should of course take place as early as reasonably possible. But that obligation is irrelevant to the question of whether a tribunal must decide if the Crown has carried out the obligation. If Donald J.A. meant to suggest that creating a “duty to decide” would help to spur the Crown along, then that is precisely the kind of result-oriented, reverse-reasoning that this Court rejected in Haida Nation (see para. 55). Nor does it advance

23 the analysis to suggest that tribunals could, if they undertook the task, adjudicate consultation issues more quickly than courts. Court proceedings may or may not move as swiftly as those of a tribunal, but timeliness is irrelevant to the issue at hand. As Justice Rothstein held in Northrop Grumman Overseas Services Corp. v. Canada (Attorney General), 2009 SCC 50, Tab 15:

It is suggested that the [Canadian International Trade Tribunal] provides an efficient dispute resolution mechanism to which there should be ready access. While the CITT may be an efficient dispute resolution vehicle, it is a statutory tribunal and access to it must be found in the relevant statutory instrument. The statutory provisions provide that access to the CITT is pursuant to specific trade agreements negotiated by governments. If the government of a supplier did not negotiate access to the CITT for its suppliers, there is no access for them. [para. 44; emphasis added]

The statute controls the analysis. If the Legislature did not confer upon the Commission the statutory responsibility to address the consultation question, the Commission cannot be faulted for failing to address it (subject, of course, to review for unreasonableness, which will be addressed later).

79. Turning to Donald J.A.’s second rationale, it is clearly incorrect to say that in the absence of a duty to decide, First Nations will be forced to seek injunctions. As Haida Nation and Mikisew illustrate, the usual remedy for a breach of the duty to consult is that the government’s decision will be quashed (see, for instance, para. 69 of Mikisew). First Nations routinely obtain such remedies from the courts.

80. Donald J.A. attempted to buttress his analysis by noting that Haida Nation “contemplates review of consultation by administrative tribunals” (para. 45). It is true that at para. 61 of Haida Nation, Chief Justice McLachlin refers to a “tribunal… evaluat[ing] the issue” (emphasis added). In the same and neighbouring paragraphs, the Chief Justice also refers to “the government”, “the decision-maker”, and “the initial adjudicator”. The “tribunal” reference can be explained in either of two ways, neither of which supports the Court of Appeal’s analysis. First, the Chief Justice might have had in mind circumstances where the duty to consult fits within a tribunal’s statutory jurisdiction. Second, she might have meant that a tribunal may contemplate making a decision or order that adversely affects claimed rights, and will accordingly choose to inquire into whether Crown consultation is required before the decision can be made (see section “B”,

below). By either route, tribunals may play a role in consultation cases in some ways and at some times, and this suffices to explain the reference to “tribunals” in Haida Nation.

81. To be clear, none of this is to say that the Commission cannot consider whether the Crown has failed to carry out its consultation obligations. It can. Alcan did not submit, as Donald J.A. suggested, that the Commission’s “public interest”-based mandate must be defined “solely in economic terms” (para. 42). This Court decided in Martin & Laseur and in Paul that tribunals have the authority to apply the Constitution in order to resolve the questions with which they have been tasked by the Legislature. As Gonthier J. put it in Martin & Laseur:

It suffices that the legislator endow the tribunal with power to decide questions of law arising under the challenged provision, and that the constitutional question relate to that provision. [para. 37]

Applied here, these cases say that the Commission can factor consultation into its public interest inquiry, if the Commission finds consultation to be relevant to that inquiry. In the language of Paul, the Commission had the authority to “interpret or decide that question [i.e., the question directed by the statute] in light of s. 35” (para. 39, emphasis added; see also paras. 32 and 34). But by purportedly using s. 35 of the Constitution to change the adjudicative responsibility of the Commission, and to substitute an obligation (to decide the consultation issue) for a discretion (to decide what is relevant to the public interest), the Court of Appeal turned the principles set out in Martin & Laseur and Paul on their head. Basic principles of administrative law, affirmed by this Court in Dunsmuir, dictate that the Commission does not have the authority to decide a different question than the one assigned to it by the Legislature. Having concluded that the 2007 EPA is in the public interest for purposes of s. 71, the Commission’s statutory mandate was fulfilled, and the Commission had no duty to decide anything else.

82. In sum, the “duty to decide” announced by the Court of Appeal is without support in the honour of the Crown or in this Court’s precedents. This duty would, contrary to Martin & Laseur, expand the adjudicative responsibilities of the Commission (and other tribunals) beyond those conferred by the British Columbia Legislature, and would, contrary to Haida Nation, invalidate the decision-making of a tribunal even where the tribunal’s decision has no effect on aboriginal rights.

83. Whatever the Constitution requires, it is not this. The honour of the Crown is not a grab- bag from which courts may produce any rule they like. Because there is no principled basis for the duty to decide announced by the Court of Appeal, that court erred both in articulating the duty as a constitutional principle, and in applying it to invalidate the Commission’s decisions.

B. “Acceptance” of the 2007 EPA was not Unconstitutional

84. Even if one assumes that the 2007 EPA was formed in breach of the duty to consult, that does not necessarily mean that the Commission’s decision to “accept” the contract pursuant to s. 71 is invalid. For the reasons that follow, the correct analysis leads to the opposite conclusion: the Commission’s decision is untainted by any constitutional defect in the process by which BC Hydro entered into the 2007 EPA. The Tribal Council’s remedies, if any, were to be had from a court sitting in judicial review of BC Hydro, not on appeal from the Commission.

85. Explanation of this point requires consideration of the extent to which the duty to consult may, in some cases, affect the function of independent, quasi-judicial tribunals.

86. As a starting point, just as there is no reason to articulate a special duty (to decide) for administrative tribunals, there is no reason to confer upon tribunals a special exemption from the duties (to consult) otherwise imposed upon the Crown. Like any other administrative decision- maker, a tribunal contemplating conduct that would bring about a fresh infringement of claimed rights or title may only constitutionally engage in that conduct after adequate consultation (and, where appropriate, accommodation).

87. That conclusion flows from the basic principle, noted in the first paragraph of this Part, that the Legislature is presumed not to have conferred upon a tribunal the power to violate the Constitution. As it was put by Justice Charron recently, “[a]n administrative tribunal acting pursuant to its delegated powers exceeds its jurisdiction if it makes an order that infringes the Charter”: Multani v. Commission scolaire Marguerite-Bourgeoys, 2006 SCC 6, [2006] 1 S.C.R. 256, Tab 14, at para. 17, quoting Ross v. New Brunswick School District No. 15, [1996] 1 S.C.R. 825, Tab 21, at para. 31 (emphasis added). The Constitution thus creates an implied limit on the exercise of statutory authority where the exercise of that authority would unconstitutionally infringe protected rights.

88. Because a tribunal acting in an adjudicative capacity will not be considered to have infringed protected rights (Paul, at para. 29), mere adjudication cannot trigger the duty to consult. But where a tribunal makes a decision the effect of which is to infringe rights claimed under s. 35, it will lose jurisdiction to make that decision unless the requirements of the Constitution – in particular, consultation – have been completed. It is therefore in keeping with the approach affirmed in Multani to hold, as this Court did in Haida Nation, that when a Crown actor “adversely affects” rights claimed by aboriginals, the decision to do so will be invalid unless it is supported and justified by the consultation process that s. 35 requires.

89. Thus far, none of this should be controversial. However, problems may arise in determining how, as a practical matter, these principles should operate where the decisions of tribunals are at issue. Quebec v. Canada, supra, recognized that it would compromise the independence and essential function of a tribunal to require it to be the entity that actually carries out consultation. On the other hand, as Professor Bankes has observed, it ought to be “a given that the Crown, the government, should not be able to avoid its constitutional responsibilities simply by the way it organizes itself internally” (p. 3). The entitlement of First Nations to consultation should not evaporate simply because the Legislature has opted to make the relevant decision-maker a tribunal rather than a minister.

90. The solution lies in the argument of “First Nations who assert that the duty is one that operates on a nation-to-nation basis and therefore rests in the Crown itself, not independent, quasi-judicial tribunals” (Mullan, supra, at p. 121; emphasis added). The duty to consult is at all times that of Her Majesty, even though the duty will invariably be triggered and discharged by her agents and emanations. When a tribunal’s decision triggers the duty, another branch of the Crown must step into the breach and uphold the Crown’s honour by carrying out consultation. The Crown’s obligation is to ensure that the duty is discharged before the tribunal makes a decision that affects aboriginal rights, in order to permit appropriate input into the project that is under review by the tribunal: see Mikisew, at para. 64. In this way, the Constitution will in all events be upheld.

91. Where a tribunal has reason to believe that its decision might be invalid in the absence of consultation, it can suspend its process to permit consultation to occur. The tribunal may instead

choose to proceed, but it does so at its peril. Should the tribunal’s decision be shown to have brought about adverse effects on s. 35 rights in the absence of consultation, the decision will be set aside on appeal or judicial review. For this reason, many tribunals will prefer to proceed cautiously. The control that every tribunal has over its own procedure as “masters in their own house” ensures that this can be done: see Prassad v. Canada (Minister of Employment and Immigration), [1989] 1 S.C.R. 560, Tab 18, at p. 568. Moreover, every tribunal must necessarily have the implied jurisdiction to decide whether or not its order would be constitutional. Thus, in this case, the Commission could undoubtedly determine whether its own decision would “amount to jurisdictional error” by reason of its unconstitutionality, and that is in fact what the Commission did. The Commission’s approach in this case reflects a commendable caution and respect for the Constitution.54

92. However, it overshoots the mark to advance the blanket proposition that the “obligation is one that is impressed upon all actors throughout the decision-making process”, as Professor Mullan does in the passages quoted earlier. If, as Professor Mullan acknowledges, “it is also critical to recognize the varying statutory and common law responsibilities of those with decision-making roles” (pp. 123-124), the analysis must comprehend that the roles of some decision-makers will be sufficiently confined that a given decision-maker cannot be said to be responsible for a potential infringement.

93. This is consistent with Haida Nation’s direction that the appropriate stage for consultation is at the “strategic planning” phase of the Crown’s activity (see para. 76). Where a tribunal’s decision contributes to the Crown’s strategic planning (and the potential for adverse effects as a result of those plans has been shown) then it may be invalid, absent consultation. Conversely, the fact that a decision did not direct or shape the Crown’s conduct will militate against finding that the decision could not be made until it was supported by a process of consultation. The Ontario Energy Board has highlighted the problems that would arise from a different approach:

There is only one Crown. The requirement is that the Crown ensure that Aboriginal consultation takes place for all aspects of

54 The National Energy Board, it might be noted, has taken an approach very much along these lines since at least 2002. See Tab 31 to Alcan’s authorities.

the project. It is not necessary that each Crown actor that is involved with an approval for the project take on the responsibility to ensure that consultation for the entire project has been completed; such an approach would be unworkable. It would lead to confusion and uncertainty and the potential for duplication and inconsistency. It would also potentially lead to a circular situation in which each Crown actor finds itself unable to render a final finding on consultation because it is awaiting the completion of other processes.55 [EB-2007-0050, Tab 32, p. 68; emphasis added]

The mere fact that a tribunal’s decision-making may involve or touch upon a subject requiring consultation ought not to prevent that tribunal’s process from moving forward, if on judicial review it is determined that that tribunal’s decision did not bring about adverse effects on rights claimed under s. 35.

94. This Court has adopted the same approach in the context of an allegation that an order of the National Energy Board would infringe a proven s. 35 right:

It is obvious that the Board must exercise its decision-making function, including the interpretation and application of its governing legislation, in accordance with the dictates of the Constitution, including s. 35(1) of the Constitution Act, 1982. Therefore, it must first be determined whether this particular decision of the Board, made pursuant to s. 119.08(1) of the National Energy Board Act, could have the effect of interfering with the existing aboriginal rights of the appellants so as to amount to a prima facie infringement of s. 35(1). [Quebec v. Canada, supra, p. 185]

Echoing Slaight Communications, Iacobucci J.’s first sentence recognizes the basic principle that statutes are presumed not to give tribunals the power to violate the Constitution. But for present purposes, it is the second sentence that is the key. If, in the context of a proven right, it is appropriate to ask whether “this particular decision of the Board”, made pursuant to a particular statutory regime, could interfere with a right, then by parity of reasoning in the pre-proof context the analysis should ask whether the particular decision before the reviewing court, made pursuant to a particular statutory regime, would adversely affect claimed rights.

55 The OEB went on to conclude – wrongly – that it was obliged to “take responsibility for the aspects of the consultation that relate to the matter before it” (p. 69). As discussed under the heading “The Honour of the Crown does not Impose a ‘Duty to Decide’”, no such obligation exists. Nevertheless, the OEB was on the right track as far as the quoted passage goes.

95. The analysis is unchanged where multiple regulatory approvals are required. What the court must assess is whether, in the particular circumstances of the case, the decision under review brought about adverse effects. Kwikwetlem First Nation v. British Columbia (Utilities Commission), 2009 BCCA 68, 89 B.C.L.R. (4th) 273, Tab 11, is a multiple approval case that illustrates the problems posed by an overzealous approach to the role of tribunals in consultation. Both a certificate of public convenience and necessity (from the Utilities Commission), and an environmental assessment certificate (from the Environmental Assessment Office) were required before the project could proceed. The potential for an infringement was clear, since the project involved building transmission lines across lands claimed by aboriginals. Huddart J.A. held that in a multi-stage process involving approvals by multiple tribunals, each and every tribunal involved had a duty to “determin[e] the existence of a duty to consult, the scope of that duty, and its fulfillment up to that stage” (para. 64), apparently without regard to whether the tribunal under appeal made a decision that actually resulted in an infringement.

96. Crucially, in Kwikwetlem both decision-makers were reviewing a project planned by the British Columbia Transmission Corporation, which is a Crown agent like BC Hydro. Thus, in invalidating the Utilities Commission’s decision, the Court of Appeal overlooked this Court’s direction in Haida Nation that the appropriate stage for consultation is at the “strategic planning” phase of the Crown’s activity. Accordingly, the duty to consult should have been discharged before either decision-maker was even asked to take up the subject. Instead, the Court of Appeal imposed responsibility on each and every decision-maker downstream of Transmission Corporation’s planning decision.

97. The practical problems presented by this approach are manifest. It would multiply the points at which consultation is litigated, giving rise to an increase in the total volume of consultation litigation, a risk of inconsistent findings among participating tribunals, an increase in the number of points of potential appeal or judicial review in relation to any subject over which more than one tribunal has authority, and a dramatic increase in both the time and complexity of obtaining regulatory approvals – and to what end? Unless an infringement results from the tribunal’s decision, there is no reason why consultation ought to be required, and accordingly there ought to be no constitutional impediment to that decision. Nothing in Haida Nation compels a different result.

98. In assessing whether a tribunal’s decision brought about adverse effects on aboriginal claims, it will always be necessary to pay close attention to the nature of the order made, the statutory authority from which it emanates, and the factual context in which the order is made. Here, s. 71 authorized the Commission to “accept” an energy supply contract that had already been brought into existence by BC Hydro, pursuant to its authority under the Hydro Power and Authority Act.

99. While the Tribal Council would have the Court conflate the Commission’s decision to accept the contract with BC Hydro’s decision to enter into the contract, the principles discussed thus far call for a more precise analysis. The two decisions, made by two independent and wholly distinct branches of the Crown, must be disentangled.

100. Focussing, as one must, on the Commission’s decision rather than that of BC Hydro, four factors establish that the Commission’s decision did not bring about adverse effects on the Tribal Council’s claimed rights.

101. First, the Commission’s approval is not required for a person to enter into an energy supply contract. The Commission does not authorize or require the formation of the contract. Indeed, s. 71 leaves it up to the Commission to decide whether there will be any inquiry or adjudication with respect to the contract at all. The section requires only that the contract be filed. The scheme set up by s. 71 is, in the language of this Court’s decision in Bell Canada v. Canada (Canadian Radio-Television and Telecommunications Commission), [1989] 1 S.C.R. 1722, Tab 3, a “negative disallowance” scheme. Such schemes

grant utility companies the right to fix tolls as they wish but also grant users the right to complain before an administrative agency which has the power to vary those tolls if it finds that they are not "just and reasonable". [p. 1758]

BC Hydro has the right to contract as it wishes, although the Commission may thereafter declare the contract to be unenforceable if it concludes that it is not in the public interest. In this sense, the Commission’s authority under s. 71 acts as a discretionary filter for certain power purchases

involving public utilities; the section does not affirmatively confer any rights whatsoever.56 BC Hydro’s authority to enter into the 2007 EPA flowed not from the Commission or the Utilities Commission Act, but from the powers conferred in the Hydro Power and Authority Act.

102. Second, the Commission’s order does not in any way authorize or renew Alcan’s water diversion activities (the authority for which is found in Alcan’s water licence). As the Commission rightly concluded, a s. 71 acceptance “does not approve, transfer or change control of licenses or authorization” (p. 122). Alcan’s access to and control over its resources is beyond the reach of s. 71. That suffices to distinguish the Commission’s decision from that of the Minister of Forests in Haida Nation, who effectively renewed Weyerhauser’s authority to cut timber, and thereby adversely affected the Haida’s claimed rights.

103. Third, under s. 71 the Commission’s mandate is not to sit in quasi-judicial review of the lawfulness of BC Hydro’s activities. The only question that the Legislature authorized the Commission to decide is whether the energy supply contract is in the public interest, according to the criteria that it stipulated. The Commission’s jurisdiction is typical of the “public interest”- based mandates that are encountered in the regulation of public utilities: see, for instance, ATCO Gas & Pipelines Ltd. v. Alberta (Energy & Utilities Board), 2006 SCC 4, [2006] 1 S.C.R. 140, Tab 1. The Commission’s job is not to determine whether the contract is legally valid. While s- s. 71(3) contemplates that a contract may be declared unenforceable, enforceability is not the subject of the Commission’s inquiry. Rather, a declaration of unenforceability is the consequence of a finding that the contract is not in the public interest.

104. Fourth, and perhaps most importantly, any infringement brought about by the 2007 EPA is the product of a strategic plan that was formulated by the Crown, acting through its agent BC Hydro, before the contract was even filed. If consultation was required, it had to occur before Her Majesty’s agents signed the 2007 EPA. In the s. 71 context, the timing of the Commission’s engagement leaves it powerless to remedy whatever constitutional defect might exist in an energy supply contract. It would do nothing to advance Haida Nation’s mission for appeal

56 Other provisions of the Utilities Commission Act may give rise to constitutional responsibilities on the part of the Crown. For instance, s. 23 gives the Commission a general supervisory authority over all public utilities, under which it can make orders or regulations. Were the Commission to exercise that power, the duty to consult might be engaged, depending on the facts. This case, of course, is strictly about the Commission’s authority under s. 71.

courts to invalidate the downstream decision of an independent Crown actor who had no input into the formulation of BC Hydro’s planning, nor any opportunity to have input into it.

105. In these circumstances, the Commission’s decision to accept the 2007 EPA did not require consultation. That is so whether or not BC Hydro’s decision to enter into the 2007 EPA had adverse effects on the rights claimed by the Tribal Council.

C. The Commission’s Approach to the “Public Interest” was Reasonable

106. The foregoing sections have explained why there was no constitutional defect in the Commission’s decision to accept the 2007 EPA. The paragraphs that follow will show that the Commission’s decision was reasonable, and therefore also valid as a matter of administrative law. Again, that is so whether or not the Commission was right in finding that the 2007 EPA did not require consultation.

107. The Commission focussed its “public interest” inquiry on cost-effectiveness – i.e. “reliability, safety, schedule, financing arrangements and other factors” that would “have ratepayer impacts”. Consultation was necessarily a matter of limited relevance, given that interpretation of s. 71.57 It is the Tribal Council’s burden to show that this approach to the provision is not one that the Commission was entitled to adopt.

108. The Dunsmuir factors for determining the appropriate standard of review (see para. 55) all point to deference with respect to the Commission’s assessment of what is relevant to the public interest. The Commission enjoys the benefit of a privative clause, in s-s. 105(2) of the Utilities Commission Act. The Legislature has signalled that deference to the Commission’s view of the public interest will be appropriate, by empowering the Commission to weigh the factors that “the commission considers relevant” in that regard. The Commission, like its counterparts in other Provinces, exists to advance a number of interrelated purposes: “fixing just and reasonable rates (‘rate setting’) and […] protecting the integrity and dependability of the supply system”; and “protect[ing] the public from monopolistic behaviour” by public utilities: ATCO, at paras. 3, 7. These objectives involve polycentric decision-making to which the

57 But not of no relevance – the Commission was open to the possibility that “consultation may be relevant for the same purpose that the Commission often considers evidence of consultation with other stakeholders”.

Commission is better suited than the courts. And finally, as the sophistication of the Commission’s decision in this case illustrates, the Commission has accumulated considerable expertise with respect to the matters before it (see also ATCO, at para. 26).

109. This Court has described the reasonableness standard as follows:

reasonableness is concerned mostly with the existence of justification, transparency and intelligibility within the decision- making process. But it is also concerned with whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law. [Dunsmuir, at para. 47; see also Canada (Citizenship and Immigration) v. Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339, Tab 4, at para. 59]

110. It was clearly within the “range of possible, acceptable outcomes” for the Commission to focus its inquiry on cost-effectiveness. That approach is consistent with the nature of the Commission’s experience, which has well-acquainted the Commission with energy pricing, generating capacities, market forecasts, and other like elements. On a reasonableness standard of review, it cannot be error for the Commission to remain within its zone of particular expertise.

111. The Commission’s approach is also consistent with the primarily economic factors that the Legislature expressly directed the Commission to consider, in s-s. 71(2):

(2) The commission may make an order under subsection (3) if the commission, after a hearing, finds that a contract to which subsection (1) applies is not in the public interest by reason of

(a) the quantity of the energy to be supplied under the contract,

(b) the availability of supplies of the energy referred to in paragraph (a),

(c) the price and availability of any other form of energy, including but not limited to petroleum products, coal or biomass, that could be used instead of the energy referred to in paragraph (a),

(d) in the case only of an energy supply contract that is entered into by a public utility, the price of the energy referred to in paragraph (a), or

(e) any other factor that the commission considers relevant to the public interest. [emphasis added]

The ejusdem generis principle of statutory interpretation lends support to the view that the factors “relevant to the public interest”, under s. 71(2)(e), should be complementary and akin to the evaluation of price and availability that is called for by s. 71(2)(a) to (d): see Walker v. Ritchie, 2006 SCC 45, [2006] 2 S.C.R. 428, Tab 25, at para. 25. While the Commission was not obliged to adhere to an economic analysis (within the bounds of reasonableness the Commission may consider what it likes), a plain reading of the provision confirms that this approach was open to it.

112. This Court’s decision in ATCO ought not to be read as diminishing the Commission’s control over what it considers to be relevant to the public interest. That case turned on the fact that the Alberta board’s order was expropriative, and thus engaged a presumption that the board lacked the power to make the order (see para. 79). This case, by contrast, is more akin to the recent decision in Bell Canada v. Bell Aliant Regional Communications, 2009 SCC 40, Tab 2. Here, as in Bell Canada, the Commission’s determination of the factors that will be relevant to its public interest assessment are at the “very core of its competence” (para. 53, distinguishing ATCO).

113. At the end of the day, it cannot be forgotten that:

as emphasized in Dunsmuir, “certain questions that come before administrative tribunals do not lend themselves to one specific, particular result. Instead, they may give rise to a number of possible, reasonable conclusions. Tribunals have a margin of appreciation within the range of acceptable and rational solutions” […]. [Khosa, at para. 67]

An assessment of how an energy supply contract will affect the “public interest” is most certainly among the questions that are not amenable to “one specific, particular result”. It is “predominantly the formulation of an opinion”: Memorial Gardens Association Ltd. v. Colwood Cemetery Co., [1958] S.C.R. 353, Tab 12, at p. 357, per Abbott J. (considering a commission’s assessment of the “public convenience and necessity”).

114. The Commission’s determination of what is relevant to the “public interest” is part and parcel of its “opinion” about what the “public interest” means. Both, therefore, are matters to which reviewing courts should defer. The Court of Appeal fundamentally misunderstood its role on review when it rhetorically queried:

How can a contract formed by a Crown agent in breach of a constitutional duty be in the public interest? The existence of such a duty and the allegation of the breach must form part and parcel of the public interest inquiry. [para. 42; emphasis added]

115. Implicit in Donald J.A.’s analysis is the proposition that the Commission’s assessment of the public interest must necessarily be imbued with constitutional concerns. But that is the very approach that a majority of this Court rejected in Multani, when it declined to accept the proposition of Justices Deschamps and Abella that constitutional principles are “dissolved into” administrative law review: compare paras. 15-17, per Justice Charron, with paras. 85-86 and 100-111, per Justices Deschamps and Abella. The majority’s approach followed this Court’s unanimous judgment in Ross, in which it was said that the “administrative law standard and the Charter standard are not conflated into one” (para. 32). On the approach adopted by the Multani majority (following Slaight Communications and Ross), a decision is invalid if it is unconstitutional, but the Constitution otherwise does not interfere with the deference to which tribunals are entitled.

116. There is thus no basis on which to conclude that the Commission’s ruling with respect to the relevance of consultation was unreasonable. That being so, an administrative law analysis offers no footing for the Tribal Council’s attack on the Commission’s decisions.

D. The Consultation Issue was in any Event Correctly Decided

117. The Commission correctly concluded that “the 2007 EPA does not give rise to a duty to consult because of the factual determinations set forth in Letter No. L-95-07” – i.e., the Impacts on Water Flows decision.

118. Like all legal duties, the government’s duty to consult First Nations has natural limits, that correspond to the purposes the duty is intended to serve. The purpose of the duty to consult, this Court said, is to avoid a situation in which

[w]hen the distant goal of proof [of a s. 35 claim] is finally reached, the Aboriginal peoples may find their land and resources changed and denuded. This is not reconciliation. Nor is it honourable. [Haida Nation, para. 33; emphasis added]

119. In keeping with this purpose, the duty to consult is only triggered where the Crown’s conduct will bring about a change. The test articulated in Haida Nation is worth setting out in full here. What the Chief Justice said is this:

But, when precisely does a duty to consult arise? The foundation of the duty in the Crown’s honour and the goal of reconciliation suggest that the duty 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: […]. [para. 35; emphasis added]

120. This standard was entrenched in Mikisew. Justice Binnie reiterated that the possibility of an adverse effect on a s. 35 right is a necessary precondition to the existence of the duty. He wrote:

The question in each case will therefore be to determine the degree to which conduct contemplated by the Crown would adversely affect those rights so as to trigger the duty to consult. Haida Nation and Taku River set a low threshold. The flexibility lies not in the trigger (“might adversely affect it”) but in the variable content of the duty once triggered. [para. 34; emphasis added]

121. Only Crown conduct can trigger the duty. Third parties – like Alcan in this case, and Weyerhauser in Haida Nation – do not owe First Nations a duty to consult or accommodate: Haida Nation, at paras. 52-56.

122. Here, the Commission’s findings of fact, recited comprehensively in Part I, establish that there is no possibility that the 2007 EPA will bring about an adverse effect on the rights claimed by the Tribal Council. The alleged infringements that have existed for decades will be neither worsened nor improved as a result of the 2007 EPA. That is because Alcan will continue to operate the Nechako Reservoir to optimize power generation, with or without the 2007 EPA, subject only to the pre-existing regulatory and other legal constraints. The Commission found that the 2007 EPA would have no effect on the storage and diversion of water to produce the

37 power, which then led it to the inescapable conclusion that BC Hydro's purchase of power could not bring about the alleged adverse effects on the Nechako River of which the Tribal Council complains.

123. The instant case is thus distinguishable from all three of this Court’s consultation cases. Haida Nation involved the renewal of a timber licence that would lead to a further depletion of forestry resources. Taku River was about a decision to build a road through an area of traditional territory that was critical to the First Nation’s economy. Mikisew, likewise, involved the construction of a road that would significantly affect trapping and hunting activities. (See also Canada (Public Works and Government Services) v. Musqueam First Nation, 2008 FCA 214, 297 D.L.R. (4th) 349, Tab 5, at para. 58, in which Sexton J.A. summarizes this Court’s cases to the same effect.) In this case, by contrast to those, the Commission found that no greater depletion of any resource will occur with the 2007 EPA than would have occurred without it.

124. The Tribal Council’s case in the court below was not that there were adverse effects on their rights as a direct result of the 2007 EPA. Rather, it was that the Commission erred in failing to find that the duty to consult was triggered by outstanding historical infringements, or by “non-physical impacts”.

125. An approach based on historical infringements would explode the scope of the duty beyond anything this Court could possibly have intended. Allegations of historical infringements blanket the resources of British Columbia, if not other Provinces as well. If the Tribal Council’s argument is correct, the duty to consult would henceforth be triggered by any Crown action, no matter how innocuous or tangential, that has some connection to a resource. The “adverse affect” requirement in Haida Nation would effectively be eliminated. That is a far cry from the protective and practical approach directed by this Court. The duty to consult was intended to advance reconciliation where the interests of the Crown and First Nations collide; it was not intended to paralyze the Crown by obliging it to consult even where its actions will have no appreciable effect on aboriginal rights.

126. As for non-physical impacts, there are three problems with this branch of the Tribal Council’s argument. First, the Tribal Council failed to prove any of the “non-physical impacts” it alleged. The allegations are listed at para. 22 of the Court of Appeal’s judgment. Each and

every allegation listed there is either not an “impact” in any sense of the word, or was considered and expressly rejected by the Commission in its findings of fact. A comparison of the list at para. 22 with the “Impacts on Water Flows” decision is illustrative in this regard. Second, the “non-physical impacts” alleged by the Tribal Council were in fact about physical impacts. All of the “non-physical impacts” were links in a causal chain that was said to lead to further damage to the water and fish resources claimed by the Tribal Council’s members. But since the Commission found that there would be no new physical impacts, then even on the Tribal Council’s logic, any “non-physical impacts” were of no consequence. Third and finally, it is difficult to see how the duty to consult could be triggered in a case like this one, absent physical impacts. Fish, like most other resources, cannot be “changed or denuded” by “non-physical impacts”. In The Duty to Consult: New Relationships with Aboriginal Peoples (Saskatoon: Purich Publishing Ltd., 2009), Dwight Newman sums up very well the problem that would arise from an approach based on “non-physical impacts”, or any similarly loose formula:

The Supreme Court's stated purpose in Haida Nation was to recognize that actions affecting unproven Aboriginal title or rights or treaty rights can have irreversible effects that are not in keeping with the honour of the Crown. […] To the extent that lower court case law recognizes that there needs to be a real adverse effect at issue before a duty to consult is triggered […] it carries forward the duty to consult test. Although the Supreme Court seemingly offered an easily triggered duty, with scope for modification of the requirements in a specific context, the triggering of a duty to consult by every government action that could, through some remote process, have some minimal adverse effect on an Aboriginal right would set up an impractical scenario for government decision-making. To say this much is not to undermine the purposes of the duty to consult, but to make it workable and efficacious in furthering the reconciliation processes. [Tab 36, p. 30; emphasis added]

127. On the correct approach, the issue reduces to whether the 2007 EPA has an adverse effect on the lands or resources that are the subject of the Tribal Council’s claims. The Commission’s findings of fact were to the effect that it does not. The Crown therefore owed no duty to consult in relation to the 2007 EPA.

E. The Commission’s Assessment was not “Preliminary”

128. Donald J.A. expressly declined to pronounce upon the merits of the Tribal Council’s consultation argument (see paras. 16, 62). Instead, he found fault with the Commission’s decision in the manner in which it approached the consultation issue procedurally. He concluded that “the Commission wrongly decided something as a preliminary matter which properly belonged in a hearing of the merits” (para. 61).

129. The Court of Appeal’s displeasure with the Commission seems to be premised on a misapprehension about the lengths to which the Commission went to resolve the issue. The Commission permitted the Tribal Council to adduce evidence, cross-examine witnesses, and make written and oral argument on the factual and legal issues relating to their consultation complaint. In the end, the Commission dedicated significant portions of four hearing days – in a hearing that was only seven days long – to hearing evidence and argument with respect to the Tribal Council’s claims.

130. While the Commission limited the scope of its factual inquiry to the effects of the 2007 EPA, that limitation is consistent with the adverse effects-based trigger for consultation. According to the principles set out in Haida Nation and Mikisew, as discussed above, an inquiry into anything other than adverse effects would have been irrelevant to the issue at hand. The limits imposed by the Commission could not otherwise have prejudiced the Tribal Council, since the Commission expressly assumed that “there has been a historical, continuing infringement of aboriginal title and rights and [that] there has been no consultation or accommodation with CSTC on either the historical, continuing infringement or the 2007 EPA”.

131. The Commission was entitled to craft an appropriate procedure by which to resolve the reconsideration application. The words of Sopinka J. in Prassad are apposite here:

We are dealing here with the powers of an administrative tribunal in relation to its procedures. As a general rule, these tribunals are considered to be masters in their own house. In the absence of specific rules laid down by statute or regulation, they control their own procedures subject to the proviso that they comply with the rules of fairness and, where they exercise judicial or quasi-judicial functions, the rules of natural justice. [pp. 568-569]

132. In the end, all that is left for the Tribal Council to complain about on this point is that the Commission called the process by which it resolved the issue a “Phase II Reconsideration Application” rather than a “hearing on the merits”. But a hearing on the merits it was. The Court of Appeal was wrong to interfere with the Commission’s decision on this ground.

PART IV: SUBMISSIONS REGARDING COSTS

133. There is no reason to depart from the ordinary rule that costs follow the event. Alcan therefore seeks costs in this Court and the Court of Appeal.

PART V: ORDER SOUGHT

134. The appeal should be allowed, and the decisions of the Commission dated December 17, 2007 and January 29, 2008 restored, with costs in this Court and the Court of Appeal.

ALL OF WHICH IS RESPECTFULLY SUBMITTED, this 17th day of February, 2010.

______Daniel A. Webster, Q.C. David W. Bursey Ryan D.W. Dalziel

PART VI: TABLE OF AUTHORITIES

CASE PARAS. CITED

ATCO Gas & Pipelines Ltd. v. Alberta (Energy & Utilities Board), 2006 103, 108, 112 SCC 4, [2006] 1 S.C.R. 140

Bell Canada v. Bell Aliant Regional Communications, 2009 SCC 40 112

Bell Canada v. Canada (Canadian Radio-Television and 101, 112 Telecommunications Commission), [1989] 1 S.C.R. 1722

Canada (Citizenship and Immigration) v. Khosa, 2009 SCC 12, [2009] 1 109, 113 S.C.R. 339

Canada (Public Works and Government Services) v. Musqueam First 123 Nation, 2008 FCA 214, 297 D.L.R. (4th) 349

District of Kitimat and Wozney v. Minister of Energy and Mines et al, 2007 18, 19, 20, 22 BCSC 429

Kitimat (District) v. British Columbia (Minister of Energy and Mines), 18 2008 BCCA 81, 77 B.C.L.R. (4th) 297

Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190 62, 70, 81, 108, 109, 113

Guerin v. The Queen, [1984] 2 S.C.R. 335 69

Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73, 1, 9, 32, 44, 50, 55, [2004] 3 S.C.R. 511 57, 61, 63, 64, 66, 69, 73, 74, 75, 77, 78, 79, 80, 82, 88, 93, 96, 97, 102, 104, 118, 119, 120, 121, 123, 125, 126, 130

Kwikwetlem First Nation v. British Columbia (Utilities Commission), 2009 95, 96 BCCA 68, 89 B.C.L.R. (4th) 273

Memorial Gardens Association Ltd. v. Colwood Cemetery Co., [1958] 113 S.C.R. 353

Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage), 75, 79, 90, 120, 2005 SCC 69, [2005] 3 S.C.R. 388 123, 130

MiningWatch Canada v. Canada (Fisheries and Oceans), 2010 SCC 2 fn. 18

Multani v. Commission scolaire Marguerite-Bourgeoys, 2006 SCC 6, 87, 88, 115 [2006] 1 S.C.R. 256

Northrop Grumman Overseas Services Corp. v. Canada (Attorney 78 General), 2009 SCC 50

Nova Scotia (Workers’ Compensation Board) v. Martin; Nova Scotia 63, 71, 72, 81, 82 (Workers’ Compensation Board) v. Laseur, 2003 SCC 54, [2003] 2 S.C.R. 504

Paul v. British Columbia (Forest Appeals Commission), 2003 SCC 55, 49, 73, 81, 88 [2003] 2 S.C.R. 585

Prassad v. Canada (Minister of Employment and Immigration), [1989] 1 91, 131 S.C.R. 560

Quebec (Attorney General) v. Canada (National Energy Board), [1994] 1 74, 75, 76, 89, 94 S.C.R. 159

R. v. Sparrow, [1990] 1 S.C.R. 1010 69

Ross v. New Brunswick School District No. 15, [1996] 1 S.C.R. 825 87, 115

Slaight Communications Inc. v. Davidson, [1989] 1 S.C.R. 1038 62, 94, 115

Taku River Tlingit First Nation v. British Columbia (Project Assessment 75, 120, 123 Director), 2004 SCC 74, [2004] 3 S.C.R. 550

United Fisherman and Allied Workers’ Union v. British Columbia 18, 19 (Ministry of Energy), [1994] B.C.J. No. 2839 (S.C.)

Walker v. Ritchie, 2006 SCC 45, [2006] 2 S.C.R. 428 111

Wewaykum Indian Band v. Canada, 2002 SCC 79, [2002] 4 S.C.R. 245 66

CONSTITUTION

Constitution Act, 1982, s. 35 94

STATUTES

Hydro and Power Authority Act, R.S.B.C. 1996, c. 212, ss. 3, 12 13, 16, 98, 101

Power Measures Act, 1966, S.B.C. 1966, c. 38, s. 7 fn. 6

Utilities Commission Act, R.S.B.C. 1996, c. 473, ss. 1 (“public utility”), 11, 47, 56, 59, 101, 2(4), 68 (“energy supply contract”), 71, 105(2) 108, fn. 56

Utilities Commission Amendment Act, 2008, S.B.C. 2008, c. 13, s. 14 fn. 5

ORDERS and TRIBUNAL DECISIONS

National Energy Board, open letter dated August 3, 2005 fn. 54

Ontario Energy Board, EB-2007-0050 93

Order-in-Council dated July 30, 1965 fn. 6

ARTICLES and TEXTS

Nigel Bankes, “Regulatory Tribunals and Aboriginal Consultation,” 73 (Spring 2003) 82 Resources 1-4

David Mullan, “The Duty to Consult Aboriginal Peoples – The Canadian 75, 90 Example” (2009), 22 Can. J. Admin. L. & Prac. 107

Dwight Newman, The Duty to Consult: New Relationships with Aboriginal 126 Peoples (Saskatoon: Purich Publishing Ltd., 2009), p. 30

PART VII: STATUTORY PROVISIONS IN ISSUE

Constitution Act, 1982, s. 35

Recognition of existing aboriginal and treaty rights

35. (1) The existing aboriginal and treaty rights of the aboriginal peoples of Canada are hereby recognized and affirmed.

Definition of "aboriginal peoples of Canada"

(2) In this Act, "aboriginal peoples of Canada" includes the Indian, Inuit and Métis peoples of Canada.

Land claims agreements

(3) For greater certainty, in subsection (1) "treaty rights" includes rights that now exist by way of land claims agreements or may be so acquired.

Aboriginal and treaty rights are guaranteed equally to both sexes

(4) Notwithstanding any other provision of this Act, the aboriginal and treaty rights referred to in subsection (1) are guaranteed equally to male and female persons.

Confirmation des droits existants des peuples autochtones

35. (1) Les droits existants — ancestraux ou issus de traités — des peuples autochtones du Canada sont reconnus et confirmés.

Définition de « peuples autochtones du Canada »

(2) Dans la présente loi, « peuples autochtones du Canada » s'entend notamment des Indiens, des Inuit et des Métis du Canada.

Accords sur des revendications territoriales

(3) Il est entendu que sont compris parmi les droits issus de traités, dont il est fait mention au paragraphe (1), les droits existants issus d'accords sur des revendications territoriales ou ceux susceptibles d'être ainsi acquis.

Égalité de garantie des droits pour les deux sexes

(4) Indépendamment de toute autre disposition de la présente loi, les droits — ancestraux ou issus de traités — visés au paragraphe (1) sont garantis également aux personnes des deux sexes.(

Hydro and Power Authority Act, R.S.B.C. 1996, c. 212, ss. 3, 12

Agent of government

3 (1) The authority is for all its purposes an agent of the government and its powers may be exercised only as an agent of the government.

(2) The Minister of Finance is the fiscal agent of the authority.

(3) The authority, on behalf of the government, may contract in its corporate name without specific reference to the government.

Powers

12 (1) Subject to the approval of the Lieutenant Governor in Council, which may be given by order of the Lieutenant Governor in Council, the authority has the power to do the following:

(a) generate, manufacture, distribute and supply power;

(b) develop power sites, power projects and power plants;

(d) flood and overflow land, purchase, otherwise acquire, accumulate and store water, raise or lower the level of rivers, lakes, streams and other bodies of water, and purchase and otherwise acquire water records and water privileges;

(e) manufacture and deal in all articles and things required for exercising the powers and duties of the authority;

(f) acquire, maintain, develop, replace, alter, administer, manage, operate and dispose of property;

(g) build, make, construct and establish every kind of structure, excavation or installation and install every kind of equipment or facility;

(h) acquire and protect, prolong and renew patents, patent rights, trade marks, designs, licences, franchises, concessions, and use, exercise, develop, manufacture under or grant licences or privileges in respect of those acquisitions and experiment with, test and improve patents, rights, inventions, discoveries, processes or information;

(i) [Repealed 2004-23-14.]

(j) apply for and obtain and exercise any franchise, licence, right or privilege that may be conferred or obtained under any Act of Canada or of any province;

(k) acquire in accordance with a statute relating thereto the right to enter on roads, highways, railways, rivers, streams, waterways and other public places to erect on, over or under any of them anything for the generation or supply of power;

(l) integrate existing power plants;

(m) purchase power from or sell power to a firm or person;

(n) purchase, subscribe for, underwrite, guarantee the subscription of and otherwise acquire and deal in, sell and dispose of stock, shares, bonds, debentures, debenture stock, notes, securities and evidences of indebtedness, of any corporation and any stocks, funds and securities of any government, municipality or other authority;

(o) acquire or lease all or part of the property, assets and undertaking, and assume any of the obligations and liabilities of a firm or person carrying on or entitled to carry on any activities that the authority is authorized to carry on or that can be carried on incidental to or in connection with the exercise of the powers and duties of the authority;

(p) assume duties and obligations of a firm or person, reimburse others for payments made and liabilities incurred and indemnify others against liabilities;

(q) issue securities in exchange for obligations assumed by the authority or in exchange for securities of any other firm or person representing those obligations, and enter into any covenants or agreements considered necessary or desirable for that purpose;

(r) amalgamate in any manner with or enter into partnership with a firm or person;

(s) enter into a working arrangement with or cooperate with a firm or person carrying on or proposing to carry on an activity that the authority is empowered to carry on;

(t) by agreement or otherwise, take part in or take over all or part of the management, supervision or control of the business or operations of a firm or person;

(u) enter into agreements with a firm or person for any of the purposes of this Act;

(v) finance the operations of a corporation that has powers the exercise of which, in the opinion of the directors, would be beneficial to the authority;

(w) do immediately anything referred to in this section in contemplation of future requirements;

(x) do anything necessary or desirable for carrying out any of the powers and purposes in this section;

(y) exercise any of the powers in section 22 of the Companies Act, R.S.B.C. 1960, c. 67.

(2) If the authority

(a) acquires all of the property, assets or undertaking of a firm or person,

(b) assumes the obligations and liabilities of a firm or person,

(d) takes over the management, supervision or control of the business of a firm or person,

the authority or the amalgamated corporation, if there is an amalgamation, may exercise and perform any power or duty conferred or imposed on it or on that other firm or person under this or any other Act for and on behalf of that other firm or person, or the amalgamated corporation, or with respect to the property or undertaking of that other firm or person, or the amalgamated corporation, with or without exercising or performing any other resulting power or duty.

(3) If the authority amalgamates with a firm or person, this Act applies as if the amalgamated corporation were the authority.

(4) The Lieutenant Governor in Council may, by order, prescribe the procedure to be followed in amalgamation of the authority with a firm or person.

(5) Despite the Land Title Act, if the authority acquires all of the property, assets or undertaking of, or amalgamates in any manner with, a firm or person,

(a) all of the interests of that firm or person that are registered in a land title office are deemed to be registered interests of the authority or the amalgamated corporation, as the case may be,

(b) the registrar of that land title office must accordingly make all necessary amendments to the register, and

(c) the amendments constitute registration of the interests under the Land Title Act in favour of the authority or the amalgamated corporation, as the case may be.

(6) The Lieutenant Governor in Council may make regulations necessary for carrying out subsection (5).

(7) Fees must not be paid for anything done under subsection (5) or (6).

(8) Nothing in this section relieves the authority from any requirement of the Utilities Commission Act that applies to the authority under section 32 (7).

(9) The Lieutenant Governor in Council, by order, may designate any agreement entered into or to be entered into by the authority that the Lieutenant Governor in Council considers relates to the provision of support services to or on behalf of the authority.

(10) For the purposes of subsection (9), "support services" means services that support or are ancillary to the activities of the authority from time to time, and includes services related to metering for, billing and collecting fees, charges, tariffs, rates and other compensation for electricity sold, delivered or provided by the authority, but does not include the production, generation, storage, transmission, sale, delivery or provision of electricity.

(11) Despite the common law and the provisions of this or any other enactment, if an agreement is designated under subsection (9),

(a) the authority is deemed to have, and to have always had, the power and capacity to enter into the agreement,

(b) the agreement and all actions of the authority taken in accordance with the provisions of the agreement are authorized, valid and deemed to be required for the public convenience and necessity,

(c) the authority is deemed to have, and to have always had, the power and capacity to carry out all of the obligations imposed under, and to exercise all of the rights, powers and privileges granted by, the agreement according to its terms,

(d) the agreement is binding on and enforceable by the authority, according to the agreement's terms, and

(e) subject to subsection (12), the authority is not required to obtain any approval, authorization, permit or order under the Utilities Commission Act in connection with the agreement or any actions taken in accordance with the terms of the agreement, and the commission must not prohibit the authority from taking any action that the authority is entitled or required to take under the terms of the agreement.

(12) Nothing in subsection (11) (e) precludes the commission from considering the costs incurred, or to be incurred, in relation to an agreement designated under subsection (9) when establishing the revenue requirements and setting the rates of the authority.

Utilities Commission Act, R.S.B.C. 1996, c. 473, ss. 1 (“public utility”), 2(4), 68 (“energy supply contract”), 71, 105(2) (as of 2007)

1 “public utility” means a person, or the person’s lessee, trustee, receiver or liquidator, who owns or operates in British Columbia, equipment or facilities for

(a) the production, generation, storage, transmission, sale, delivery or provision of electricity, natural gas, steam or any other agent for the production of light, heat, cold or power to or for the public or a corporation for compensation, or

(b) the conveyance or transmission of information, messages or communications by guided or unguided electromagnetic waves, including systems of cable, microwave, optical fibre or radiocommunications if that service is offered to the public for compensation,

but does not include

(c) a municipality or regional district in respect of services provided by the municipality or regional district within its own boundaries,

(d) a person not otherwise a public utility who provides the service or commodity only to the person or the person’s employees or tenants, if the service or commodity is not resold to or used by others,

(e) a person not otherwise a public utility who is engaged in the petroleum industry or in the wellhead production of oil, natural gas or other natural petroleum substances,

(f) a person not otherwise a public utility who is engaged in the production of a geothermal resource, as defined in the Geothermal Resources Act, or

(g) a person, other than the authority, who enters into or is created by, under or in furtherance of an agreement designated under section 12(9) of the Hydro and

Power Authority Act in respect of anything done, owned or operated under or in relation to that agreement;

2 (4) Sections 1 to 3 and 5 to 13, 15,18 to 21, 28 to 30, 32, 34(3) and (4), 35 to 42, 44, 46.3, 48, 49, 54, 56, 60(1) and (b) and 61 of the Administrative Tribunals Appointment and Administration Act apply to the commission, and for that purpose a reference to a deputy chair in this Act is a reference to a vice chair under that Act.

68 “energy supply contract” means a contract under which energy is sold by a seller to a public utility or another buyer, and includes an amendment of that contract, but does not include a contract in respect of which a schedule is approved under section 61 of this Act;

71 (1) Subject to subsection (1.1), a person who, after this section comes into force, enters into an energy supply contract must

(a) file a copy of the contract with the commission under rules and within the time it specifies, and

(b) provide to the commission any information it considers necessary to determine whether the contract is in the public interest.

(1.1) Subsection (1) does not apply to an energy supply contract for the sale of natural gas unless the sale is to a public utility.

(2) The commission may make an order under subsection (3) if the commission, after a hearing, finds that a contract to which subsection (1) applies is not in the public interest by reason of

(a) the quantity of the energy to be supplied under the contract,

(b) the availability of supplies of the energy referred to in paragraph (a),

(c) the price and availability of any other form of energy, including but not limited to petroleum products, coal or biomass, that could be used instead of the energy referred to in paragraph (a),

(d) in the case only of an energy supply contract that is entered into by a public utility, the price of the energy referred to in paragraph (a), or

(e) any other factor that the commission considers relevant to the public interest.

(3) If subsection (2) applies, the commission may

(a) by order, declare the contract unenforceable, either wholly or to the extent the commission considers proper, and the contract is then unenforceable to the extent specified, or

(b) make any other order it considers advisable in the circumstances.

(4) If an energy supply contract is, under subsection (3) (a), declared unenforceable either wholly or in part, the commission may order that rights accrued before the date of the order under that subsection be preserved, and those rights may then be enforced as fully as if no proceedings had been taken under this section.

(5) An energy supply contract or other information filed with the commission under this section must be made available to the public unless the commission considers that disclosure is not in the public interest.

105 (2) Unless otherwise provided in this Act, an order, decision, or proceeding of the commission must not be questioned, reviewed or restrained by or on an application for judicial review or other process or proceeding in any court.