Written By Laura Gill, Mike Theroux, Shawn Munro, Aaron Rankin and Venetia E.K. Whiting

The grant of exploration dispositions for oil sands located beneath treaty lands did not trigger the Crown's duty to consult, the Saskatchewan Court of Appeal held recently in Buffalo River Dene Nation v Ministry of Energy and Resources and Scott Land and Lease Ltd, 2015 SKCA 31. In upholding the initial decision of the Saskatchewan Court of Queen's Bench on judicial review (discussed in an earlier blog here), the Court concluded that the posting for sale and issuance of the exploration dispositions (the "Permits") involving lands on which members of Buffalo River Dene Nation ("BRDN") exercise Treaty 10 rights did not have the potential to adversely affect those rights primarily because the Permits did not confer a right to enter on the surface of the lands.

The test for whether the Crown has a duty to consult involves consideration of three parts: (1) whether the Crown has knowledge of a potential Aboriginal claim or right; (2) the nature of the contemplated Crown conduct; and (3) the potential for that conduct to adversely affect an Aboriginal claim or right. In Buffalo River, only the third element was contested: whether the posting and issuance of the Permits had the potential to adversely affect BRDN. BRDN's concern was limited to the potential adverse impacts that might result from a permit holder attempting to access or exploit the minerals underlying treaty lands, rather than any potential impact resulting from the mere sale of mineral rights.

After extensively reviewing prior case law on the Crown's duty to consult, the applicable legislation and government policies, and the terms of the Permits, the Court held that the issuance of the Permits did not give rise to an adverse impact on BRDN's rights under Treaty 10 and that the duty to consult was therefore not triggered. The Court's conclusion was based on two main reasons:

• Because the Permits granted only subsurface rights (and not surface rights) and BRDN did not advance a treaty right or Aboriginal claim to subsurface rights or rights exercisable in relation to the subsurface of Treaty 10 lands, there was "no overlap" between the exploration rights under the Permits and BRDN's Treaty 10 rights. The potential for an adverse impact was not proven as the posting and issuance of the Permits did not have an "appreciable or current impact" on treaty rights under Treaty 10.
• Consideration of the duty consult is premature at this stage because there cannot be a meaningful foreseeable impact on Treaty 10 lands without the occurrence of a second-stage surface access approval from the Crown. An actual impact on Treaty 10 land only becomes possible once surface access is contemplated. As there was no evidence to show a causal relationship between the decision to issue the Permits and the "speculative future adverse impacts of oil sands exploration and development" on BRFN lands, there was "nothing to consult about".

The decision indicates a judicial reluctance to recognize a duty to consult for the mere sale of mineral rights, where surface access and other development is subject to subsequent approval and such second-stage activity is not yet contemplated. This decision may be persuasive in other resource-rich jurisdictions such as Alberta and British Columbia, where exploration dispositions would not give the permit holder the right to access treaty lands and subsequent approval from the Crown is required for surface exploration and development activities. However, the case suggests that the duty to consult may be triggered in cases where the surface exploration and development is contemplated or proposed at the time of the Crown's disposition of mineral rights and that activity may have a foreseeable adverse impact on Aboriginal or treaty rights.

If you have any questions about how the Buffalo River decision may impact you or your business, please contact Laura Gill, Mike Theroux, Shawn Munro, Aaron Rankin or Venetia Whiting.