“This court ruling all but guarantees increased uncertainty for natural resource projects in Canada and a potential increase in cost for economic development across the country. In provinces like British Columbia, future natural resource projects may be scuttled, and existing projects may be halted or shut down,” Ravina Bains, the study author and associate director of aboriginal policy studies at the Fraser Institute, said.

This is the first time in Canadian history that a declaration of aboriginal title (the right to land or territory) has been recognized outside an Indian reserve. Unlike previous judgments, this ruling states that aboriginal title can extend to all traditional territories and is not limited to specific villages. This is particularly important in British Columbia, where one-third of the country’s First Nations reserves are located and where, because of overlapping claims by First Nations, outstanding claims involve more than 100% of the province’s land.

Now, on land where aboriginal title has been established, project development requires the consent of the First Nation that holds the title, except where the crown demonstrates a compelling and substantial public purpose for the project. Where aboriginal title hasn’t been recognized, the crown, not individual project developers, must continue to consult and accommodate First Nations. Moreover, project developers may be forced to increase compensation to First Nations groups before continuing with development.

“As a result of this ruling, provincial and federal governments must now clarify what they deem to be in the ‘broader public objective’ in anticipation of similar court cases granting aboriginal title and potential economic projects being proposed across the country,” Bains said.

According to the court ruling, aboriginal title includes the right to occupy, possess, and manage land; the right to decide how land will be used; and the right to the economic benefits of the land.

Once the title is recognized, if there is a project on that land that the First Nation does not support, then the government may be required to cancel the project if continuation of the project would be unjustifiably infringing on the title land. Existing economic development projects might be suspended or shut down. Alternatively, a potential penalty for this infringement might be additional compensation to the First Nation group for the continuation of the economic development project.

The Canadian Supreme Court judgment “will be written about, analyzed and discussed for decades to come,” the Fraser Institute study concluded. “In the short term, it will have impacts on treaty negotiations in British Columbia, and it has created a higher standard of engagement with First Nations who have aboriginal title. Over the longer term, it will result in an environment of uncertainty for all current and future economic development projects that may end up being recognized as on aboriginal title lands. Needless to say, this judgment is a real game changer.”

(The Fraser Institute study is available as a free download at: www.fraserinstitute.org/ research-news/display.aspx?id=21571.)