The past year has seen a lot of Canadians paying attention to aboriginal land rights. From opposition by aboriginal groups to proposed pipeline developments in their traditional territories, to a recent declaration of aboriginal title in British Columbia, to ongoing disputes over modern treaty implementation, aboriginal land rights have come to occupy an increasingly prominent place in public policy discussion in this country.

When the issue of legal uncertainty relating to aboriginal land rights is raised, the solution most often proposed is for governments to engage in negotiations with aboriginal groups aimed at comprehensive land claims settlements. Yet a recent report we authored for the Fraser Institute, focusing on modern land claims agreements in Yukon, indicates that the certainty dividend from such agreements can prove illusory, particularly if courts do not prioritize legal certainty in their decision-making.

Yukon’s successful negotiation by the early 1990s of agreements aimed at resolving land claims disputes with First Nations initially seemed to provide tremendous legal certainty on aboriginal rights questions. And the territory proudly touted its negotiated agreements as an advantage in attracting investment to its natural resource sector.

Until relatively recently, the Fraser Institute’s annual surveys of mining industry executives indicated that aboriginal land claims were not perceived as generating significant investment uncertainty in Yukon. Indeed, Yukon fared well relative to other jurisdictions. However, there has been a dramatic shift in perceptions since 2012, with far fewer mining executives surveyed indicating that Yukon offers legal certainty with respect to aboriginal land claims. Indeed, an increasing number cite this uncertainty as discouraging investment.

Our study argues that the increased perception of legal uncertainty can be linked directly to case law developments. Supreme Court of Canada decisions on the duty to consult aboriginal peoples and the interpretation of modern treaties have begun to suggest that so-called comprehensive land claims agreements may not be so comprehensive after all. Courts have shown a willingness to reinterpret and go beyond the terms of what are highly detailed agreements, in order to impose additional, unforeseen consultation obligations on governments. They have also extended consultation obligations to new types of government decision-making, in one case effectively overturning the legislative framework that had long governed mining in Yukon. It is perhaps not surprising, then, that potential investors have taken notice and have shown a greater reluctance to invest in a territory that now seems to offer far less legal certainty than it once appeared.

The situation in Yukon offers lessons that extend well beyond the borders of that territory. If court decisions undermine the certainty dividend that is supposed to attach to modern land claims agreements, then the incentives for governments and aboriginal groups to enter into such agreements will be diminished. This imperils the objective of lasting reconciliation between aboriginal and non-aboriginal Canadians. In addition, by perpetuating conditions of legal uncertainty, courts can make Canadian jurisdictions less attractive in the global competition for investment in natural resources. This undermines options for economic development and prosperity for aboriginal and non-aboriginal Canadians alike.

As our study emphasizes, however, it is possible to provide robust protections for aboriginal rights without creating conditions of legal uncertainty. First, courts should not impose obligations that go beyond the express terms of modern land claims agreements, unless genuine gaps in the agreement are found.

Second, courts can develop doctrines like the duty to consult in ways that provide better guidance to governments and other parties, such as resource companies. Crucially, doing so will require courts to engage in the gradual, case-by-case elaboration of standards, rather than engaging in ad hoc policy-making or further dramatic shifts in jurisprudence.
 
The Supreme Court of Canada, a long way from Yukon in every respect, will nonetheless make major legal determinations that affect the future of the territory. We should all encourage it to get things right, and be ready to speak out when it does not. Legal certainty matters that much.