Foreign Affairs Prerogative and the Federal Court: Hupacasath First Nation v Canada

Ever since the Supreme Court of Canada confirmed the Crown’s duty to consult with Aboriginal peoples in Haida Nation v British Columbia (Minister of Forests), [2004] 3 SCR 511, courts have been tasked with determining precisely when the duty is triggered, and against which government actors the duty applies. In Hupacasath First Nation v Canada (Ministry of Foreign Affairs) 2015 FCA 4 [Hupacasath], the Hupacasath First Nation (“HFN”) argued that the duty applied to the ratification of the Agreement between the Government of Canada and the Government of the People’s Republic of China for the Promotion and Reciprocal Protection of Investments (“CC-FIPA”), a bilateral investment treaty.

While the Federal Court of Appeal (“FCA”) ultimately denied the HFN claim on its merits, it allowed the issue to be heard, rejecting arguments that it was both non-justiciable and outside the jurisdiction of the Federal Court.

CC-FIPA and the Duty to Consult

On September 9, 2012, the federal government announced it had signed CC-FIPA. The agreement relates to the treatment of foreign investors and includes protection from expropriation without compensation. Violations of the agreement may result in proceedings before an arbitral tribunal that could lead to monetary awards. The HFN argued that these arbitral awards create an incentive for the government to act in a manner that avoids breaching CC-FIPA and that this may cause the government to injure its rights and interests. Consequently, the HFN argued Canada was obligated to consult with it and, if necessary, accommodate its rights and interests.

At the first instance, the Federal Court rejected the HFN’s argument. It found no conflict, “actual or potential,” between the provisions of the CC-FIPA and the HFN’s asserted rights and interests. The HFN appealed to the FCA.

The Federal Court Has Jurisdiction over Foreign Affairs Prerogative 

The first issue considered by the FCA was whether it had jurisdiction to hear the case.

The ability to conduct foreign affairs and enter into international agreements is an area where cabinet holds prerogative powers. To bring CC-FIPA into effect, it used these powers to make an order instructing the Minister of Foreign Affairs (“Minister”) to issue an instrument of ratification. Any review of this order is a review of the foreign affairs prerogative. The FCA found itself obligated to determine whether it had jurisdiction to allow the review to take place.

The issue turned on the court’s interpretation of section 2(1) of the Federal Courts Act. The provision defines the actors within the jurisdiction of the Federal Court and includes any body that has authority under an order made pursuant to a prerogative power. The Ontario Court of Appeal considered the provision in Black v Canada (Prime Minister), (2001) 54 OR (3d) 215. In the decision, the court took a narrow interpretation that hived off exercises of “pure” federal prerogative power from exercises of powers under orders made by or under prerogative power.

In Hupacasath, the FCA rejected this distinction:

An interpretation that the Federal Court has the power to review federal exercises of pure prerogative power is consistent with the Parliament’s aim to have the Federal Courts review all federal administrative decisions. The contrary interpretation would carve out from the Federal Courts a wide swath of administrative decisions that stem from federal prerogative, some of which can have large national impact (para 54).

Had the Ontario Court of Appeal’s interpretation been accepted, cabinet’s order authorizing the Minister to issue the ratification instrument would have to be reviewed by a provincial superior court, while the actual issuance of the instrument would have to be reviewed by the Federal Court. The FCA believed, quite rightly, that this bifurcation was inefficient.

The Exercise of the Foreign Affairs Prerogative was Justiciable 

The second issue considered by the court was whether the exercise of the prerogative was justiciable.

The government argued that exercises of pure prerogative are reviewable only where the Charter rights are at issue, citing Canada (Prime Minister) v Khadr, [2010] 1 SCR 44, and Operation Dismantle Inc v Canada, [1985] 1 SCR 441. The FCA rejected this broad proposition. It held that non-justiciable issues are very rare, being limited to

Exercises of executive power [that] are suffused with ideological, political, cultural, social, moral and historical concerns of a sort not amenable to the judicial process or suitable for judicial analysis. In those rare cases, assessing whether the executive has acted within a range of acceptability and defensibility is beyond the court’s ken or capability, taking courts beyond the proper role within the separation of powers (para 66).

After considering whether facts of the case fell within this narrow categorization, the FCA determined that the government’s objection had no merit.

There Is No Duty to Consult 

The final issue considered by the court was whether the duty of consult was triggered on the facts of the case.

As noted in the introduction, the FCA held that the duty to consult did not arise in these circumstances. It found that adverse effects to CC-FIPA on the HFN were speculative. Investment in Canada does not necessarily lead to a conclusion that Aboriginal rights will be affected.

The court noted:

The problem with the appellant’s submission is that notwithstanding the existence of other agreements, there is no evidence deserving of sufficient weight that these agreements are causing or might cause Canada to make decisions that are contrary to law. In particular, there is no evidence that those agreements are causing Canada to make decisions that do not respect Aboriginal rights (para 91).

In order to make a non-speculative claim regarding the CC-FIPA, the HFN must wait until there is a “prospect” of a decision or event that affects its Aboriginal rights.

Conclusion

Although the HFN was unsuccessful in its claim, the Hupacasath decision is significant insofar as it provides a clear articulation of the FCA’s view on the Federal Court’s jurisdiction vis-à-vis Crown prerogative and the exercises of executive authority that will be considered non-justiciable. The court’s analysis in these areas appears to expand the range of the federal administrative decisions that are reviewable by the Federal Court.