Free-entry Mineral Regimes and Aboriginal Title

by Nigel Bankes and Cheryl Sharvit

Introduction

The administration and control of Crown-owned minerals in both Yukon and the Northwest Territories remain vested in the Crown in right of Canada, and the prevailing disposition legislation is therefore federal. For the last century, the Government of Canada has proceeded on the assumption that mining legislation in both territories allows miners to enter onto the traditional lands of Aboriginal peoples, stake claims, go to lease, and produce and export minerals, all without the consent of the Aboriginal peoples concerned and without compensation to those peoples.

We question the validity of this assumption in light of s. 35(1) of the Constitution Act, 1982. In the full version of this paper, published by CARC as Northern Minerals Programme Working Paper 2,i we also question the validity of the assumption in light of the terms of the 1870 Imperial Orderin-Council pursuant to which Rupert's Land and the NorthWestern Territories became part of Canada.

The Elements of a Free-entry System 

The analysis of whether mineral legislation is unconstitutional as a result of s. 35 depends to a large extent on the free-entry nature of the Yukon Quartz Mining Act (YQA) and the Canada Mining Regulations (CMRs). Both the YQA and CMRs incorporate all three features that characterize a free-entry scheme for disposing of resources. First, there are few, if any, qualifications to be eligible to acquire rights to the resource (YQA, s. 8(7); CMRs, ss. 7-8, 11-12). Second, all lands in which the Crown holds mineral interests are presumed open for staking and acquisition of mineral resources unless expressly withdrawn (YQA, s. 12;CMRs,ss.3, 11). Thus each regime expresses the default judgement that mining is the highest and best use of the land. While the actual exercise of a withdrawal power by the Crown will be a key defence to any claim that the legislation infringes a constitutionally protected title, the existence of a withdrawal power in itself does not limit the extent of lands open for staking and, in particular, does not preclude staking on title lands.

The third element of free-entry systems is that rights to the resource are acquired by the actions of the staker. One acquires a claim by being first to properly locate a claim (YQA, ss. 31-33; CMRs, ss. 13-19). The claim must be recorded within a prescribed time(YQA s. 39; CMRs, s. 24(1)).Properlocation requires placing posts and marking boundary lines, which in treed areas is by blazing trees and cutting underbrush (CMRs, s. 16; YQA, s. 29). Such staking activities may themselves cause limited, but unnecessary (and avoidable by adopting a map-staking system), environmental damage.

Once acquired, claims may be held in perpetuity in Yukon and for ten years in the N.W.T., provided representation work is performed or a fee paid in lieu. Under either regime a claim holder has a right to obtain a 21 -year renewable lease (YQA, s. 72; CMRs, ss. 58-59). Both regimes require representation work to maintain a claim and as a prerequisite to going to lease.

Rights acquired through acts of staking and under leases are extensive and include rights to mineral resources and to the surface. Although both the CMRs and the YQA include provisions to deal with a surface owner or occupier whose lands are damaged or compromised as a result of mineral activities, the relevant sections have not been applied to provide compensation or relief to Aboriginal title claimants. Further, the sections are premised on the assumption that the surface owner has no right to deny access to and use of the surface of his or her land and that he or she is entitled merely to compensation for damages suffered and, perhaps, for loss of use. The mineral regimes therefore accord priority to mineral interests granted under the legislation. Aboriginal peoples with an existing Aboriginal title may not refuse entry to prospectors or prevent them from carrying out mineral activities on Aboriginal lands.

Neither regime provides for revenue sharing with Aboriginal title holders or for Aboriginal involvement in the disposition process. There is no requirement of consultation with Aboriginal peoples in whose traditional territory a claim is located and no opportunity for Aboriginal peoples to object to the staking of claims. Neither disposition scheme provides for Aboriginal involvement at the leasing stage. Finally, even government intervention is kept to a minimum and discretion (or power) strictly confined. Not only do the regimes allow interests to be disposed of on title lands, they actually require such dispositions where demanded by a staker, and there is no discretion on the part of the Mining Recorder to consider Aboriginal interests.

In addition to the proprietary framework established by the YQA and the CMRs, there is of course a plethora of environmental and regulatory standards (including the Territorial Land Use Regulations) with which the proponent of a mineral project must comply. We contend that while consideration of these regulatory requirements may affect the answers to our questions at the margins, it will not alter our primary assessment of the proprietary aspects of the regime. We think that there will usually be an insufficient nexus between the proprietary infringement and the subsequent regulatory control to allow evidence of that regulatory control of activities to be adduced to justify the infringement. The legislation governing land and water uses and deposits of waste is not concerned with protecting Aboriginal title interests or compensating interference with title; nor does it provide Aboriginal peoples with a role in land- and resource-use (i.e., property) decisions affecting title lands.

The Constitutional Protection of Aboriginal Title

Section 35 of the Constitution Act, 1982 "recognizes and affirms" existing Aboriginal rights, including title. Where there is an allegation of infringement, a court will apply the four steps described by Chief Justice Lamer in Gladstone:

[F]irst, the court must determine whether an applicant has demonstrated that he or she was acting pursuant to an aboriginal right; second a court must determine whether that right was extinguished prior to the enactment of s. 35(1) of the Constitution Act, 1982; third, a court must determine whether that right has been infringed; finally a court must determine whether that infringement was justified.

 In doing so, the court is entitled to review the overall structure of the disposition regime.

We shall not deal with proof of title or extinguishment; instead we proceed on the assumption that the Aboriginal peoples in Yukon and the N.W.T. who have not executed a modern land-claim agreement can establish an existing title. The DelgamauLw decision of the Supreme Court of Canada decides that the content of an Aboriginal title includes the exclusive right to occupy and use the territory "for a variety of purposes," and the right to determine the use to which title lands are put. DelgamauLw suggests that title is a proprietary right, and Aboriginal property owners can thus avail themselves of the full panoply of protections available to any owner, including trespass and nuisance.

Delgamuukw also suggests that there are two limitations on the exercise of an Aboriginal title. The first is the long-standing restriction that an Aboriginal title is inalienable except to the Crown. Second, Justice Lamer suggests that the exercise of the title "must not be irreconcilable with the nature of the group's attachment to the land" (pare 117) or "inconsistent with continued use by future generations of aboriginals" (pare 154; see also pare 166).

Prima facie Infringement 

The individual or group challenging the legislation must demonstrate a prima facie infringement of the right or, in the present context, that there has been a limit on the exercise of title rights. Any "adverse restriction" on the exercise of a right or any "meaningful diminution" of rights effected by the legislative scheme as a whole constitutes a prima facie infringement.

For present purposes our inquiry focuses on the disposition scheme as a whole rather than on particular dispositions. We think the mineral disposition schemes in the territories clearly limit the exercise of title rights and represent a meaningful diminution of those rights. The exclusivity of title, coupled with the fact that "what aboriginal title confers is the right to the land itself" and the right to decide to what use the lands shall be put, suggests that a scheme that allows others to gain competing proprietary interests within the title area represents an interference with the Aboriginal title. Although Delgamuutw suggests that Aboriginal title will always include minerals, we do not believe that proof of a mineral content to an Aboriginal title is a necessary condition for a successful attack on a free-entry mineral regime. We say that largely on the basis that surface rights granted under a free-entry system may engender significant interference with the surface interests included in an Aboriginal title.

First, the YQA and CMRs treat all Aboriginal lands as if they were open for staking and purport to allow others to do things on the surface that only an owner can authorize. Both schemes purport to permit uses of land that would give an ordinary property owner a common law cause of action such as trespass or nuisance. Second, a free-entry regime is premised on the proposition that mining is the highest and best use of the lands in question, thus ignoring entirely the Aboriginal perspective and preventing the exercise of Aboriginal decision-making rights with respect to those lands. The Court's reasoning in limiting the uses that Aboriginal peoples may make of title lands suggests that any similar such use of the land for these purposes by the Crown or a licensee of the Crown (prior to a surrender by the Aboriginal people concerned) is aprimufacie infringement, for it too must be irreconcilable with the Aboriginal interest in the land.

Another approach to the question of prima facie infringement focuses on the breadth of the statutory powers to grant interests or rights. Legislation that authorizes the issuance of rights or dispositions where such dispositions potentially interfere with the exercise of Aboriginal rights is a prima facie infringement unless it is structured to attempt to accommodate those rights. The YQA and CMRs require the issuance of a disposition once certain formalities, none of which serve to ensure that Aboriginal title or rights are protected, are met.

The withdrawal provisions in both territories and the practice pursuant to them indicate that the Crown does use these executive powers to ensure that some land is available for the settlement of Aboriginal claims. This does not preclude a finding of primofacie infringement for two reasons. The first is that the policy is limited to interim withdrawals to preclude new third-party interests once negotiations reach a fairly advanced stage; lands are identified for interim withdrawal pending final selection. In effect, the exercise of the withdrawal power is best characterized as facilitating claims negotiations and not accommodating an existing Aboriginal title. Second, the policy is simply that-a statement of policy. Neither the legislation nor the regulations lay out how these discretionary withdrawal powers will be exercised, and the withdrawal power is not itself a direct limit on legislative dispositions. In several cases the Supreme Court has struck down general discretionary powers that fail to provide guidance to decision makers on how to accommodate Aboriginal rights or title.

We think it is fair to conclude that both the YQA and the CMRs dispose of interests in land which may be title land, and that neither regime seeks to accommodate Aboriginal interests or acknowledges that unextinguished title may exist in territorial lands.

Justification

The onus is on government to justify a primo facie infringement once established. There are two steps to this process. First, government must establish that it was acting pursuant to a valid, or compelling and substantial, legislative objective. The Courts have been reluctant to find government objectives to be invalid so long as they are not overly vague.

The second part of the test requires government to demonstrate that the infringement is consistent with the nature of the special fiduciary relationship between the Crown and Aboriginal peoples. This means that government must try to achieve the valid legislative objective in a way that upholds the honour of the Crown and its obligations to Aboriginal peoples. The analysis requires examination of the overall disposition system as well as the particular licenceor incident that brought the conflict to court. To justify an infringement, government must demonstrate that in pursuing the valid objective it has 1) recognized an appropriate priority for the Aboriginal interest; 2) consulted with potentially affected title holders; 3) attempted to ensure that the infringement of the Aboriginal interest has been as small as possible given the legislative objective; and 4) made available fair compensation.

Priority 

It is clear that neither the CMRs nor the YQA seeks to accommodate an Aboriginal priority. By failing to reflect that there may be existing title rights to lands in the territories, or that the lands may already be occupied, the legislation does not recognize the prior interests of Aboriginal peoples in their title lands. Neither scheme accommodates Aboriginal participation or removes economic barriers for Aboriginal peoples in the mining sector. In fact, the automatic nature of a free-entry disposition makes it very difficult to trigger an obligation to negotiate an economic benefits agreement. On its own, the withdrawal power or its exercise does not reflect the priority of Aboriginal title, but the Crown may be able to justify an infringement if it has entered into good-faith negotiations with the Aboriginal people concerned with a view to expeditiously identifying and then protecting title lands by withdrawing them from disposition.

Consultation

Delgamuulw requires Aboriginal involvement in all decisions respecting title lands, and in most cases something "significantly deeper" than mere discussion or consultation will be necessary. Where the potential infringement is significant, government may have to gain the consent of the Aboriginal people. While it is possible that in a particular case consultation in the context of a mineral disposition may be adequate, neither territorial mineral regime provides for consultation with Aboriginal title or rights holders for the purpose of satisfying obligations to accord priority to those rights. In neither territory does the legislation provide for any kind of involvement of Aboriginal title holders in "decisions with respect to their land." The mineral disposition schemes in the territories fall short of even the minimal requirements for appropriate consultation.

Minimal Interference

The cases indicate that government must demonstrate that it sought to achieve the valid legislative objective in a manner that would interfere as minimally as possible with Aboriginal rights.

We think that a court might reasonably pose the following questions in the context of justification: 

1. Has government re-examined the mineral disposition legislation since the entrenchment of Aboriginal rights in 1982 to see if government has truly taken account of the existence and importance of Aboriginal rights and title?

2. Has government examined other types of disposition regimes to see if they might better take account of the interests of Aboriginal peoples in their traditional territories? Such regimes might include a leasing regime or a negotiated concession regime or a substantially modified free-entry regime that incorporates some elements of ecologically based land-use planning as well as Aboriginal priorities.

There has been no fundamental re-thinking of the free-entry system in either jurisdiction in light of the entrenchment of Aboriginal and treaty rights in the Constitution.

Compensation

Neither the CMRs nor the YQA explicitly contemplates compensating Aboriginal title holders for interference with the mineral content of an Aboriginal title. Although there are several provisions in the YQA, the Yukon Surface Rights Board Act, and the CMRs (ss. 70-72) that deal with the payment of compensation to surface owners, it is not clear that these provisions contemplate payment of compensation to persons claiming under an Aboriginal title.

Conclusion

We have argued that there is a prima facie case for thinking that free-entry mineral regimes are inconsistent with a claim of an unextinguished Aboriginal title. While it may be possible for the Crown to justify such a regime, we think that the justification analysis will have to focus on the extent to which government has actually used its statutory withdrawal power to protect Aboriginal title lands from alienation. In the final analysis, this question can be determined only on a case-by-case basis, but, when one considers the limited use of the withdrawal power, the timing of the exercise of the power in the land-claim negotiating process, and the grandparenting of third-party rights, we think that it will be a difficult case for government to meet.

Nigel Bankes is a Professor of Law at the University of Calgary. Cheryl Sharvit is an LLM Candidate at the University of Calgary.

Note

1. The full version of this paper is available from CARC's Yellowknife office: "Aboriginal Title and Free Entry Mining Regimes in Northern Canada." ISBN: 0-919996-77-9.

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