February 15, 2008 Métis Mining Company British Columbia To: Métis Mining Company Re: Continued prospecting rights, subsurface rights and access to prospecting claims in relation to land under dispute. Your company has asked our firm to provide you with a legal opinion on how your mining company s prospecting rights, as well as possible subsurface and access rights, may be affected in an area of land that may be the subject of litigation between the Lheidli T enneh First Nation ( LTFN ) and Treaty 8 First Nations over a boundary dispute. Based on our analysis of the facts and the law below, it is our opinion that if litigation ensues between the LTFN and the Treaty 8 First Nations over the overlap area, also containing mineral resources, you have a valid claim to be viewed as an interested third party to the action and it is likely the Métis Mining Company can acquire intervener status. This intervener status would be granted as litigation would likely address ownership of mineral rights and subsequent surface access to these mineral resources resulting in economic consequences to your company. 1
Your access to mineral rights is complicated by the determination of whether the land in question falls under the Treaty 8 boundaries or is accorded to the LTFN under aboriginal title. In the former case you will enjoy the same entitlements that you currently possess. In the latter case, the law is uncertain and awaits future litigation. STATEMENT OF OPINION Métis Mining is in a strong position to have its case heard in the event that the decision on the disputed land should come before a Canadian court. In the event of a finding of aboriginal title on the disputed land Métis Mining will have some difficulty in keeping their prospecting claims and acquiring subsurface and surface access rights. The common law position severely limits Métis Mining s entitlement to the relevant prospecting claims. In light of the legislation there may be opportunities for litigation or negotiation in order to promote resource development as an important use of the land in question. In this manner recent legislation such as the First Nation Land Management Act ( FNLMA ) will be an important addition to Métis Mining s submissions or negotiation tactics. In the event that there is no finding of aboriginal title to the disputed lands, the existing rules will apply and Métis Mining can proceed with prospecting claims and surface and subsurface access via provincial regulations. SUMMARY OF FACTS AND ASSUMPTIONS 2
Our opinion is based upon the following facts: Under the B.C. Treaty Commission s process, the LTFN has completed four of the six steps required to negotiate their present day Treaty between the LTFN and the provincial and federal governments; In the proposed Treaty, the LTFN is claiming an area of land that Treaty 8 First Nations argue overlaps with the southern boundary of the historic Treaty 8 signed in 1899; Currently, the LTFN and Treaty 8 First Nations have agreed to enter into negotiations to sort out the overlap issue; If the negotiations are not successful, it is possible that the LTFN and the Treaty 8 First Nations may commence litigation on the overlap issue; The Métis Mining Company has established prospecting claims in the overlap area in accordance with the Mineral Tenures Act; and The Métis Mining Company does not yet have subsurface and access rights to their prospecting claims. We have assumed the following information: If the LTFN Treaty is ratified, the LTFN will become signatory to the First Nation Land Management Act. 3
Please review the facts and the assumptions and advise as to whether they are correctly stated. If the facts or assumptions are incorrect, our opinion may have to be changed. STATEMENT OF ISSUES The legal issues arising from your problem are as follows: 1. Whether or not the Métis Mining Company will have intervener status in the event of litigation and what restrictions may the court place on Company s submissions as intervener? 2. If the disputed lands were held by LTFN on the basis of aboriginal title who would own the minerals underlying those aboriginal title lands, as distinct from reserve lands or Treaty lands? a. Who would have the right to dispose of those minerals to third parties? b. What role if any does the free entry system, regarding mineral rights, play on lands where aboriginal title is granted? c. If there is a grant of aboriginal title on the disputed lands can the Métis Mining Company keep their prospecting claims and acquire subsurface and surface access rights? 4
3. What is the scope of the duty to consult if the LTFN is granted aboriginal title regarding the disposition of subsurface mineral rights? 4. If the LTFN is not successful in a claim for aboriginal title and the land retains its status as Treaty 8 land, what is the effect on the disposition of mineral resources on such lands? a. Who has a duty to consult Treaty 8 First Nations when disposing of subsurface mineral rights? b. Whether or not the Métis Mining Company is affected by the Crown s duty to consult the Treaty 8 First Nations before entering on Treaty 8 land and staking mineral claims. 5. What are the potential consequences for the Metis Mining Company if the LTFN ratifies its Treaty? LEGAL OPINION 1. Whether or not the Métis Mining Company will have intervener status in the event of litigation and what restrictions may the court place on Company s submissions as intervener? It has been a long established rule that the court has the discretion to decide if a third party will be heard in regards to a legal action. Generally, if the third party can prove that they 5
will be impacted by any court decisions then their chances of participating increase. Furthermore, if the court feels that the involvement of the third party is imperative to settling the matter then the court will allow the participation of the third party. The court will generally hear from a party or grant standing for private interest, when the individual applying to be heard is directly impacted, for example; an individual who has been charged with an offence. A public interest group can apply for standing by bringing an action forward on behalf of a specific group to challenge a piece of legislation which they deem as unfair unconstitutional. The courts interpretation as to what constitutes an interest or an impact to a third party can range from financial impact, where the decision will affect the income of the company and thereby the employees to the third party interest of a father where the mother is opting for an abortion. In the latter case, the injunction was overruled however, the court still acknowledged the interest of the father (Tremblay v. Daigle, 1989). Based on case law, intervener status may be granted to anyone who will be impacted by the outcome of the court decision (Yellowbird & Samson Cree Nation v. Crown, 2000). Therefore, it is likely that the Métis Mining Company will be granted intervener status by the court if litigation ensues between the LTFN and the Treaty 8 First Nations as it directly impacts the economic position of your Company and its mining interests. There is also a duty for the applicants to inform any interested parties regarding issues which are going before the court and will have an impact on First Nations within the Treaty 8 6
area. The court has found it unfair to not inform all First Nations parties who have an interest. The court has allowed parties to join actions late in order to ensure that matters are handled in a fair and open manner. The courts desire to ensure fairness where third parties can and may be impacted by court decisions makes it fair to say that the Métis Mining Company as a associated First Nations group as well as a company who will be impacted by a change in Aboriginal title would have a vested interest in the court proceedings and therefore should be heard and /or consulted with. Should Métis Mining be granted intervener status, the Company should be aware of some of the challenges it may face from the court. The court may direct submissions to only address the issue of how the potential change in title will adversely affect the Métis Mining Company. It is likely that our arguments will need to centre around the financial impact on the corporation and its employees. 2. If the disputed lands were held by the LTFN on the basis of aboriginal title who would own the minerals underlying those aboriginal title lands, as distinct from reserve lands or Treaty lands? Aboriginal title was initially held by the Treaty 8 bands and was ceded to the Crown at the signing of Treaty 8. Although there has not yet been a finding of aboriginal title on any of the claimed lands in favour of the LTFN, the Supreme Court in Delgamuukw v. British Columbia 7
described some of the entitlements that would flow from a grant of aboriginal title if it were found. First, aboriginal title encompasses the right to exclusive use and occupation of the land for a variety of purposes that need not be aspects of aboriginal practice that are integral to distinctive aboriginal cultures. The Court has found that this title encompasses mineral rights and that lands held pursuant to aboriginal title should be capable of exploitation for such purposes subject to certain limitations. If the disputed land were granted to the LTFN as aboriginal title rather than as treaty land or reserve land then the LTFN would own the minerals in this manner. However this cannot be understood as an absolute right. It is important to understand the way in which activities by aboriginal people on their own aboriginal title land are limited in order to understand the limits on the use of land by other parties. Despite the right of exclusive use and occupation of the land, aboriginal groups holding land by virtue of aboriginal title must not use the land for anything that would be irreconcilable with the nature of the group s attachment to the land. Thus, if an aboriginal group were able to establish their right to aboriginal title because of their historic connection with the land through hunting and fishing activities the Court has reasoned that they will not be able to use the land in such a way as to destroy its value for such hunting and fishing activities. Thus if aboriginal title is granted because of historic hunting and fishing connections the same land could not then be used for strip mining. 8
The aboriginal right to title devolves from the attachment of a community to certain areas of land and their continued existence and interaction with that land. For this reason, the Court held in Delgamuukw that if aboriginal people wish to use their lands in a way that aboriginal title does not permit, they must surrender those lands and convert them to non title lands. If the group holding aboriginal title cannot use the land in an inconsistent manner then it would be unlikely that a third party could use the land that is subject to aboriginal title for a purpose that is contrary to historic connections with the land. This conclusion is instructive for Métis Mining s position as it implies that mining activities may not be possible at all on lands where the Court makes a finding of aboriginal title. It is important to note that these pronouncements in Delgamuukw are tenuous due to the final finding of the case. The Court did not find aboriginal title under the facts but sent the case back to the trial level so that the evidence could be reconsidered. However the statements listed above are instructive of where the Court is going on aboriginal title issues. There is a clear statement on ownership of minerals. The ownership of minerals by the aboriginal group holding aboriginal title works a serious disadvantage to Métis Mining s position. Under these circumstances a decision that favoured Métis Mining s interest in the disputed lands could only be rendered if an effective argument could be made for overturning the finding in Delgamuukw of who owns the minerals under aboriginal title lands. a. Who would have the right to dispose of those minerals to third parties? 9
Although aboriginal title encompasses a right to exclusive use and occupation it is not the same as a fee simple property ownership scenario. The important difference is that the aboriginal group holding title would not be able to alienate any part of the land to anyone except the Crown. The Court held in Delgamuukw that alienation brings about an end to the entitlement of the aboriginal people to occupy the land and terminates their relationship with it. Therefore, if the LTFN had aboriginal title to the disputed land then Métis Mining would face two problems. First, Métis Mining would be a third party and therefore even if the LTFN wanted to grant mineral rights to Métis Mining they would be unable to do so directly. The LTFN would have to be willing at a minimum to cede the mineral rights underlying the relevant lands to the Crown in order for Métis Mining to have any chance of acquiring subsurface rights. There is no precedent to determine whether or not the surface lands would also have to be ceded by the LTFN in order for alienation to be properly effective. The second problem is that, following any alienation to the Crown, the Crown would be under an obligation to deal with that land in a manner that took account of the needs of the aboriginal people. However both of these statements ignore the problem that if the LTFN is attempting to acquire title to the disputed land there is no rational reason why they would attempt to acquire title or establish treaty rights to the land in question just to turn around and alienate part or all of the land to a mining company. 10
b. What role if any does the free entry system, regarding mineral rights, play on lands where aboriginal title is granted? The free entry system governs the exploration and staking processes for Crown minerals in B.C. It applies to all privately owned lands and Crown lands where the mineral title is also vested in the Crown. The free entry system is discussed in more detail under Issue Three but the important concern here is that the free entry regime allows a person holding a mining license to go onto any lands where the minerals are owned by the Crown and conduct exploratory mining activity. From the foregoing discussion we see that mineral rights on lands subject to aboriginal title are reserved to the aboriginal title holders. The only way in which the free entry system would apply to Métis Mining s subsurface or access interests is in the event that the aboriginal title has been alienated to the Crown. c. If there is a grant of aboriginal title on the disputed lands can the Métis Mining Company keep their prospecting claims and acquire subsurface and surface access rights? Since there has been no case law on access rights of third parties subsequent to grants of aboriginal title there is no satisfactory answer to this question. A few points regarding infringement of aboriginal title are all that may be offered. 11
The Court held in R. v. Sparrow that aboriginal rights are not absolute and may be infringed if the infringement is justified by a substantial and compelling legislative objective for the good of the larger society. Aboriginal title is one species of aboriginal right and so the possibility outlined in Sparrow applies equally to aboriginal title. Therefore in order for Métis Mining to acquire such rights they would need to show that the objective of infringing the aboriginal title that had been granted incorporated a substantial and compelling legislative objective. There are arguments that resource development generates important sources of income and employment among the larger community. Any argument in support of a legislative objective aimed at the good of the larger society would have to extend along this line of reasoning. However there is no guarantee that such a line of reasoning would be successful. If there was a finding of aboriginal title for the LTFN and the test for a justifiable infringement was not successfully met then Métis Mining would not be able to keep their prospecting claims, nor would they acquire subsurface rights or surface access rights to the disputed lands. Therefore on a prima facie reading of the current state of aboriginal title Métis Mining will have few entitlements to prospecting claims. The interests of third parties are likely secondary to the ownership rights of those holding aboriginal title. Nevertheless some of the possibilities for negotiation and consultation are discussed below. 12
3. What is the scope of the duty to consult if the LTFN is granted aboriginal title regarding the disposition of subsurface mineral rights? At the moment the LTFN is making a claim of aboriginal title to the disputed land. This claim has not yet been finalized through litigation or by negotiation with the federal government. While this claim has not been resolved, the case law on the issue suggests that the government has a duty to consult with the LTFN on resource development on the land. While the extent of such a duty to consult is not clear, Métis Mining s interest may be limited if consultation with the LTFN finds that mining may negatively impact their aboriginal title interests before they are resolved. The duty to consult is one which the federal and provincial governments owe regarding any decisions which will impact First Nations. In order to fully address the issue of consultation government has a substantial duty of care to ensure all reasonable measures have been utilized to inform any First Nations groups of a pending change and to allow for those nations to be heard. There is a duty to provide the financial resources to ensure mediation takes place if all parties are in agreement to mediate. Government has a duty to invest in the needs voiced by the community. Project proponents may be delegated some of the procedural aspects of consultation. Whether or not title is granted to the LTFN the Métis Mining Company will want to consult with the LTFN regarding the effects their operation may have on the exercise of rights by the LTFN. 13
4. If the LTFN is not successful in a claim for aboriginal title and the land retains its status as Treaty 8 land, what is the effect on the disposition of mineral resources on such lands? The foundation for the province of British Columbia s control and disposition of mineral resources of Treaty 8 lands lies in the Treaty 8 itself. The surrender clause notes: The said Indians do hereby cede, release, surrender and yield up to the Government of the Dominion of Canada, for Her Majesty the Queen and Her successors for ever, all their rights, titles and privileges whatsoever, to the lands included within the following limits As such, all rights and privileges, including mineral interests, were given up to the Government of Canada. The division of powers between provincial and federal solidified with the Constitution Act of 1982. While Section 91 of the Act provides exclusive authority of the Federal government over Indians and Lands reserved for Indians, Section 92 of the Act provides for the exclusive provincial authority to make laws concerning exploration, development, conservation and management of non renewable natural resources. The approach to mining by the provincial Crown is based upon a free entry mining system governed by the Mineral Tenures Act allows miners to enter onto land to inspect and stake mineral claims. The Act suggests that a miner possesses a right of entry onto land provided the land is not occupied for mining, underneath a dwelling, or protected heritage property. Use, entrance and occupation of land in relation to exploration or production of mineral land is 14
allowed unless explicitly prohibited. While the Act specifically prohibits entrance onto protected heritage property, the definition emphasizes areas of archaeological or historical significance, rather than areas under Treaty 8 claimed by Treaty 8 bands exerting rights over traditional land use areas. Miners maintain their priority to a claim by physically staking their claim. They must maintain this claim by continuing to do work on the property and produce the staked minerals. The free entry mining system in place in British Columbia encourages exploration and development of British Columbia s mineral resources. The system creates opportunities for entrepreneurs, including Métis Mining, and subsequent employment for tradesmen. The validity of title over Treaty 8 lands was called into question in Re Paulette when a number of Aboriginal chiefs attempted to file a caveat with the land titles office claiming an interest in tracks of land due to non extinguishment of aboriginal title. Their claim was based upon the premise that First Nation representatives signing the numbered treaty did not believe they were surrendering land. If the court held that title was not extinguished, the caveat would protect aboriginal interest in that land. While the court held there was evidence to maintain the caveat based upon evidence that the treaty was delivered as an ultimatum and threats of coercion, the case does not stand for a final resolution of the issue and applied specifically to Treaty 8 lands in the Territories. 15
The current provincial legislation protects and regulates a free entry mining system to ensure Métis Mining s ability to stake mining claims, surface access and rights to their subsurface interests on an overlap area currently claimed by the LTFN. a. Who has a duty to consult Treaty 8 First Nations regarding the disposition of subsurface mineral rights? Although the Mineral Tenures Act does not specifically refer to Aboriginal consultation it has been noted that the obligation to consult First Nations on lands under treaty subject rests with the Crown. The Supreme Court of Canada in Haida Nation v. British Columbia (Minister of Forests), ruled that the legal obligation to consult rests with the Crown. Further, Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage) notes that the Crown must act in good faith by fulfilling its duty to consult with First Nations when taking up land under Treaty 8. Both cases acknowledge that while the Crown is under a duty to consult, the duty extends to meaningful process of consultation in good faith rather than reaching an agreement. In application to the current issue, because some of the Métis Mining s prospecting claims fall upon the overlap area claimed by the LTFN, the duty to consult with LTFN and other Treaty 8 bands claiming interest rests with the provincial and federal Crown. 16
b. Whether or not the Métis Mining Company is affected by the Crown s duty to consult the Treaty 8 First Nations before entering on Treaty 8 land and staking mineral claims. The Mineral Tenures Act does not require consultation with First Nations whose traditional territory is affected. The Act does not also specifically mention the ability of First Nations to object to the staking of claims or provide for First Nation involvement in the process. It is evident that the Crown has a responsibility of consultation while recent case law suggests that the duty to consult may also lie with the third party seeking interest in the land. The extent of Métis Mining s legal duty of consultation prior to entering onto overlap land is unknown. However, it is clear that there is some duty resting with the company as consequence from the Crown s duty. This duty would likely be procedural in nature requiring Métis Mining to engage in the consultation process and be informed of First Nation concerns. 5. What are the potential consequences for the Metis Mining Company if the LTFN ratifies its Treaty? If the LTFN is successful in incorporating the disputed land into the final, ratified treaty, then Métis Mining s claim will become subject to both the treaty negotiated through the British Columbia Treaty Commission system and the First Nations Land Management Act (FNLMA) of 17
which the LTFN may be signatories. Both the proposed treaty and FNLMA will give the LTFN considerable say in the manner in which the mineral resources on their land are developed. In force since 1999, the FNLMA was negotiated between bands like the LTFN and the federal government. The Act represents an attempt to provide First Nation groups with the ability to support their communities through resource development on their lands. The FNLMA seeks to correct the historical control government officials held over resource development on reserve lands through the Indian Act by providing signatory bands with sweeping powers to control resource development through an as of yet undetermined land management code. These powers include the legal power to grant licenses and interests in relation to the land and the right to collect the revenue acquired under the land system for the band s benefit and use. A band s power would also extend to setting conservation measures as well as the creation of enforcement measures to ensure compliance with the land code. Any law made by bands under the FNLMA would be invalid if they contradict federal laws. Legal and political commentators have criticised the FNLMA because funding for the program will be provided by the federal government on the basis of the number of revenueproducing land transactions undertaken by bands. The issuance of licences, permits, leases and allotments increase a band s administrative costs and therefore would attract more funding. Criticism has been levelled at the funding system for being too transaction driven and encouraging resource development which may not promote traditional land use. Commentators 18
have pointed out that bands with high numbers of transactions would essentially be able to benefit from the funds from the resource development as well as the federal funding provided, while bands with fewer transactions would have less opportunity to fund a land and resource management program. A funding system that encourages high numbers of land transactions, such as the granting of licenses, could benefit the Métis Mining Company if its current or future prospects become subject to a LTFN land management code. While Métis Mining s operations may be subject to environmental and conservation bylaws in addition to federal and provincial laws, the revenue driven system may make it easier for the Company to obtain access to mining resources in LTFN land. However, the increased demand for workers with land management skills may mean that First Nation groups using this system cannot hire qualified individuals to carry out their programs. Depending on how this plays out, Métis Mining may have their claims put on hold due to lack of LTFN administrative infrastructure, or it may mean that the LTFN band is more willing to grant resource development permits in an attempt to fund their program. Beyond the FNLMA, the LTFN band has reached stage five of a six stage process to finalize a modern treaty through the British Columbia Treaty Commission (BCTC). As of October 29, 2006 the LTFN band and the BCTC had created a final agreement which outlines the extent of LTFN power to control resources on band land. While the final agreement, if 19
ratified as is, would prevent the LTFN from closing existing mines, it would allow them to administer fees, rents and charges in relation to resource development on their land. The Métis Mining Company has several legal options to protect their claims on the disputed land if it does in fact the LTFN s aboriginal land claim is successful. The first option is to litigate the matter in an attempt to ensure that Métis Mining interests are not affected. Litigation may not be the best way to protect such claims if aboriginal title is found. Courts have generally expressed the concept that aboriginal title, if proven, is stronger than the government s land title claims because aboriginal title existed before Canada became a country. If aboriginal title is found to exist on the disputed land, Métis Mining may be better situated if it takes advantage of the pro resource development system which will likely come about through the FNLMA. The self government and self management that the LTFN band has achieved through the modern treaty process may work in Métis Mining s favour if they can negotiate continued resource access to aboriginal title land. Such resource development may often benefit the LTFN band as they require funds to develop their own systems of governance. CLOSING Kindly review the enclosed and schedule an appointment to discuss your matter further. Please be advised that if you wish to pursue legal action, the action must be commenced within six months of this date. We will not take any steps until we have your further instructions. We look forward to hearing from you. 20
Yours truly, Carter, Chant, Henderson, and Williams LLP 21