Consultation, Accommodation, and the Right to Say “No”: How Aboriginal Rights Help to Protect the Environment

Allen Brett Campeau is a law student at McGill University and an Associate Editor with the McGill Journal of Sustainable Development Law. He studied the impacts of climate change on Arctic terrestrial ecosystems during his BSc and MSc degrees in Geography and Biology. You can connect with him on Twitter here: @ABCampeau

Canada’s commitment to tackling climate change and pursuing reconciliation with Indigenous Peoples is often challenged by deep-seated economic interests in fossil fuel development. The Trudeau Government has aimed to strike a balance between the economy and the environment while touting a new “Nation-to-Nation” relationship with First Nations, Inuit, and Métis people. It has thrown its support behind both the Paris Agreement on climate change and the Declaration on the Rights of Indigenous Peoples (UNDRIP), which would grant Indigenous Peoples greater say over resource development on their traditional territories. However, the Government also advocates resource-driven economic development and support for the ailing oil industry in Alberta. We are told that new tar sands infrastructure, like the Kinder Morgan Trans Mountain pipeline expansion, can be built while still honouring our climate change commitments and the principles of UNDRIP. This is a delicate balancing act for the Government, but the power and influence of the oil industry has a way of tipping the scales. Can this imbalance be remedied by implementing UNDRIP and better protecting Aboriginal rights?

Rally against the Kinder Morgan Trans Mountain pipeline expansion on Burnaby Mountain (November 17, 2014). Attribution: Mark Klotz.

On May 10, 2016, Canada officially removed its objector status to UNDRIP, almost 10 years after it was first adopted by the UN General Assembly. It was a watershed moment, of sorts, for our country, which has long struggled with colonialism and its ongoing consequences. After making the announcement, Indigenous and Northern Affairs Minister Carolyn Bennett received a rare standing ovation at the UN. The move was also celebrated here in Canada, with Perry Bellegarde, the National Chief of the Assembly of First Nations, hailing it as a “historic day”. This was, after all, the first step towards actually implementing UNDRIP, which the Trudeau Liberals promised to do in their 2015 election platform.

Canadian governments have expressed reservations about UNDRIP because of perceived conflicts with existing Canadian legislation, like the Indian Act, and with the Canadian constitutional framework. Section 35 of the Constitution Act, 1982 recognizes and affirms Aboriginal rights, but it does not define them, leaving issues of uncertainty to be resolved in the courts. Of particular relevance to climate action and resource development is the so-called “duty to consult”, established in Canadian case law, which requires the Canadian government to consult and accommodate Indigenous Peoples on matters that affect their rights. However, there currently exists no constitutionally protected Aboriginal right to be consulted. Nor is there any requirement for the government to obtain the consent of an Aboriginal group before approving developments on their territory. This is perhaps the most important – and politically controversial – difference between Canadian law and UNDRIP, since its Article 19 may be interpreted as compelling States to “obtain [the] free, prior and informed consent [of Indigenous Peoples] before adopting and implementing legislative or administrative measures that may affect them.” The full implementation of UNDRIP would require recognition of this right in Canadian law, potentially giving Indigenous Peoples a “veto power” – a right to say “no” – over developments on their territory.

Idle No More protesters in Ottawa. Attribution: Moxy.

The Trudeau Liberals have not acknowledged anything approaching an Aboriginal veto power in their recent approvals of pipelines and other fossil fuel projects. In fact, the Government appears to be backpedaling on its promise to implement UNDRIP and has largely ignored Aboriginal concerns in the pipeline and climate change debates. Less than two months after declaring Canada’s unconditional support for UNDRIP, Minister Carolyn Bennett expressed scepticism of an Aboriginal veto power and stated that development projects “in the national interest are to be considered.” This position is in keeping with recent jurisprudence on Aboriginal rights and title in Canada, like Tsilhqot’in Nation v British Columbia (2014), which set out a test allowing the Crown to override Aboriginal title in certain circumstances. Put simply, the Government can approve a project that occupies or traverses Indigenous lands, despite opposition, if they check all the boxes on the “duty to consult” and show a “compelling and substantial public interest” in the project. The promise of jobs in the oil patch and the refrain that “we need to get our resources to tidewater” could allow the Government to justify its December 2016 approval of the Kinder Morgan Trans Mountain pipeline expansion. And if there was any doubt about the Government’s position on UNDRIP’s Article 19, Prime Minister Trudeau stated “No, they don’t have a veto” when asked about First Nations that continue to oppose the pipeline.

The Government’s approval of the Trans Mountain project was a welcome boost for the oil industry, but raises serious doubts about its commitment to climate action and reconciliation with Indigenous Peoples. Charlene Aleck, an elected Councillor with Tsleil-Waututh Nation at the heart of the pipeline debate, called the political maneuvering of the Trudeau Liberals a “fundamental betrayal.” Her First Nation is one of several pursuing legal action against the Government, arguing that they were not properly consulted about the project. The outcomes of these lawsuits are far from certain given the rapidly evolving nature of Aboriginal law in Canada, but recent jurisprudence suggests a growing willingness to recognize Aboriginal title and land rights. The Government’s formal recognition of UNDRIP presents an opportunity for the courts to strengthen protections for Aboriginal rights and entrench previously unrecognized rights, perhaps even the right to say “no” to developments on Indigenous lands. Indigenous communities stand to gain a stronger hand in development planning and an even more important leadership role in Canadian climate policy, with the likely upshot being a healthier planet for all of us.

An Antitrust Remedy to “Economic Anxiety”

Fabian is a McGill first-year law student who completed a D.C.S. in Commerce from Collège de Bois-de-Boulogne. His main interests are antitrust law, corporate governance, and law and economics.

Attribution: Alex Proimos, Wall Street Sign

Economic inequality has sparked resentment across the Western hemisphere, which played right into the hands of populist politicians. Common people were led to blame globalisation and immigration for their misfortunes, thereby ignoring their real causes. Certainly, there are genuine racists and xenophobes, but it is unhelpful and quite distorting to paint almost half the electorate as such. The average person is admittedly not completely colour-blind, but normally they would neither so vehemently wish to bar refuge to homeless children fleeing certain death, nor to round up harmless illegal immigrants and deport them à la Gestapo.

However dismissed by many commentators, Western voters’ “economic anxiety”, rooted in rising economic inequality and job insecurity, may explain the current political climate. A further inquiry shows that it is a deficiency in firm competition which may be at the source of the problem.

Economic Inequality

Last year, McKinsey, a management consultancy, released a report about income inequality, in which it concluded that the real income of most households in developed countries (65-70%, or 540-580 million people) either stagnated or fell between 2005 and 2014. It also warned that “today’s younger generation is at risk of ending up poorer than their parents”, especially the less-educated. The simplest evidence which supports that conclusion is youth unemployment rates in Europe. Another aggregate measure which illustrates this reality is wealth. A study by Credit Suisse, a bank, shows that the world’s top 1% possess more wealth than the rest of the world and, based on that study, Oxfam estimates that the richest 8 men are wealthier than the world’s bottom 50%.

Economic inequality is also evidenced by firms’ rising after-tax profits. McKinsey calculated that, in the US, they have reached their highest as a share of GDP since the Great Depression. Further figures are provided by the Economist: US firms’ after-tax cash flow and global return on invested capital have reached all-time records.

These figures could be spun differently depending on perspective and motives. It is certain, however, that they are symptomatic of structural problems. The benefits of free markets are supposed to diffuse onto all participants and raise society’s general welfare. Current policies, or lack thereof, fail their underlying theory for, however cliché and populist this sounds, the rich are getting richer and the poor are getting poorer. At best, current policies alleviate widening inequalities by transferring assistance funds to households (as does, for instance, the new Canada Child Benefit scheme), but they do not tackle the structural problems that cause and perpetuate these widening inequalities in the first place. That is cause for concern, for these trends are greatly unsustainable, both economically and politically (if not morally, too). The urgency of action is heightened especially by the rise of technological advances that threaten to fundamentally change the landscape of labour markets and to increase job insecurity, which would further exacerbate inequalities.

Stifled Competition Reveal Market Deficiency

Generally, free markets are efficient only if they are perfectly competitive, according to neoclassic economic theory. While this is obviously theoretical due to the model’s many assumptions, governments can still intervene to correct markets’ inherent imperfections. That is why, for instance, Canada’s Competition Bureau and America’s Federal Trade Commission (FTC) are given regulatory powers to sanction anticompetitive behaviour and fraudulent marketing practices.

But, in light of the above data, these powers seem either limited or unexercised, for markets are getting more and more concentrated. The revenue shares of big firms are increasingly getting disproportionate: a study by the Economist shows that, in aggregate, the top four firms of every sector have increased their revenue share by more than 5 percentage points since the late-90s to 32%. The trend to further concentration is mostly accentuated in the three following sectors, where the increase in the revenue share of the top four firms is double the average increase: transports and logistics, retail, and finance and insurance. A more wholesome study by the Council of Economic Advisers (to the American President) points out that the top 10% of US nonfinancial firms now accumulate 8 times more on their invested capital than the median firm, almost triple the rate from the 90s.

This concentration is worrisome because it reflects a generalised monopolistic behaviour. In the traditional microeconomic model, when a firm innovates and gains a competitive advantage therefrom by raising its prices, its competitors catch on and new firms enter the market to reap the benefits of the increased prices; the sudden increase of offer, the model holds, would eventually lower prices. But this is not happening. Because there is a steep, decades-long decrease in start-ups, firms have successfully consolidated their positions, as shown by the above figures. Coupled with other factors, notably the record $10 trillion wave of mergers and acquisitions from 2008 to 2015 and the 33% increase in lobbying spending, big firms have an 80% likelihood of keeping their positions ten years later, shows the Economist’s study, a jump of 30 percentage points from the 90s.

Apart from business efficiency and innovation concerns, this trend explains in part the aforementioned inequality. As big firms increase their earnings, they share them with their employees and investors, which leaves those of competing firms poorer, hence increasing the inequality. Also, instead of benefiting consumers and satisfying labours markets’ offer surplus, these firms rather park their excess cash (estimated at $800 billion a year in the US, according to the Economist study) in offshore or domestic banks, or spend it in buyback schemes.

Attribution: Carol M. Highsmith, Federal Trade Commission’s Headquarters in Washington

Antitrust Regulation to Free Competition

Antitrust regulators ought to be alarmed by these figures. According to a Financial Times analysis, the Obama administration blocked M&As worth $400 billion. This figure seems considerable, but it results from an average of 17 public challenges a year which, in total, only accounted for a meager 4% of the absolute value of M&As under Obama’s watch.

This laissez-faire policy suggests that antitrust regulators either lack resources or the appropriate tools to prevent anticompetitive practices, because the rise of oligopolistic markets is too consequential to ignore. The danger of dirigisme looms over granting broader authority and resources to antitrust regulators, yet such a risk remains a better alternative to unyielding economic policies which fail to address structural problems. Increased competition would stimulate innovation and investment on the long run and rescue domestic labour markets and lower prices, which would alleviate depressed wages and, in turn, may exercise inflationary pressures to properly heat up the world economy. Only then could interest rates perhaps regain their normal levels; albeit an efficient lubricant, loose monetary policy can only sustain economies as long as markets remain competitive.

Yet, it seems unlikely that antitrust policy would be revamped anytime soon, as the current mood is for further relaxation of regulatory standards. The Trump administration wants to deregulate banks which, granted, will stimulate the economy on the short run, but it might also set the stage for a rerun of the last financial meltdown. The Republicans have planned to reform the tax system, which would patriate firms’ $2.1 trillion offshore excess cash (or at least some of it) and somewhat lower the widening inequality gap. But without increased antitrust regulation, the world economy will remain unsustainable, and popular discontent, threatening at large.

Interested in learning more about inequality and economic policies? We suggest these selected articles from our past issues and other further readings:

These articles are referenced as suggested reading. It should not be taken to imply their authors share the views expressed above. 

Blog authors are solely responsible for the content of the blogs listed in the directory. Neither the content of these blogs, nor the links to other web sites, are screened, approved, reviewed or endorsed by McGill University. The text and other material on these blogs are the opinion of the specific author and are not statements of advice, opinion, or information of McGill.