Appeal dismissed. The Minister has qualified immunity of the state to make his decision to refuse a certificate of authorization to a mining exploration company’s proposal due to a lack of social acceptability from the Cree community. This decision was not made lightly or in a manner indicative of bad faith or serious recklessness.

Indigenous Law Centre – CaseWatch Blog

Strateco Resources Inc [“Strateco”] is a mining exploration company listed on the Toronto Stock Exchange. In 2005 and 2006, when the price of uranium was on the rise, it acquired 559 mining claims in the Otish Mountains region in Northern Quebec, a region recognized for its uranium potential. The proposed mining area is located 210 km from Mistissini, a Cree community, and 275 km from Chibougamau, on territory covered by the James Bay and Northern Québec Agreement [“Agreement”].

The Agreement is a modern treaty designed to reconcile the rights and interests of Aboriginal peoples and those of non-Aboriginal peoples in Northern Quebec. The rights it grants Aboriginal peoples are referred to in s 35 of the Constitution Act, 1982, whose purpose is “[t]he reconciliation of Aboriginal and non-Aboriginal Canadians in a mutually respectful long-term relationship”.

After a number of consultations, the Minister refused to issue the certificate of authorization, stating that the proposal had not garnered social acceptability from the Cree community and has therefore not placed sufficient importance on the principles set out in s 152 of the Environment Quality Act [“EQA”].

Following this decision, Strateco filed legal proceedings against the Attorney General of Quebec [“AGQ”], seeking $182,684,575 in damages and $10,000,000 in punitive damages. Essentially, it argued that the Minister was not entitled to base his refusal to issue the certificate of authorization on the lack of social acceptability. It submitted that the Minister’s decision was not only illegal, but was tantamount to a disguised expropriation of its claims. It further argued that the government of Quebec and the Minister had breached their duty of coherence by announcing a moratorium after having encouraged companies to invest in uranium production in connection with the Plan Nord. The matter was dismissed and Strateco has appealed.

This Court is of the opinion that the appeal should be dismissed. While the Minister’s decision to refuse the issuance of the certificate of authorization does not clearly fall within the category of core policy decisions, it enjoys the qualified immunity of the state. Strateco therefore had to show that the Minister acted in bad faith or with serious carelessness or recklessness. It did not make such proof. The Minister was entitled to base his refusal on the lack of social acceptability of the project, without this being likened to a right of veto granted to the Cree. As for the moratorium announced by the Minister and his refusal to issue the certificate, they do not constitute a disguised expropriation of Strateco’s claims nor a breach of the duty of coherence.

Social acceptability is directly related to the perceived threat that a project may pose to the life or quality of life of a milieu. This perception depends on a multitude of factors, such that the social acceptability of a project, or in other words, its acceptance, does not necessarily correlate to its environmental and social effects. It follows that the Minister was entitled to base his refusal to issue the certificate of authorization on the lack of social acceptability. By giving decisive weight to this factor, he did not stray so far from the principles that ought to guide the exercise of his discretionary power that absence of good faith can be deduced and bad faith presumed. The Minister did not make his decision lightly or in a manner indicative of bad faith or serious recklessness.

Strateco knew from the outset the risk it ran in undertaking its uranium exploration project. It was fully aware that, ultimately, the Minister could either agree or refuse to issue the certificate of authorization. The evidence reveals that all the steps leading to the Minister’s decision were followed. In refusing to issue the certificate of authorization, the Minister merely exercised the right provided for in the EQA. There was no appropriation or stripping of Strateco’s claims. Moreover, Strateco was not dispossessed of the claims. Neither the announcement of a moratorium nor the Minister’s refusal to issue the certificate can be considered an absolute denial of its right of ownership.

Indeed, the evidence shows that uranium is a unique substance that gives rise to many concerns on the part of the public. There is an importance of properly informing the local populations in order to anticipate the factors that could foster the acceptability of the project for these populations. Strateco had fully grasped the fact that social acceptability was at the heart of the project’s feasibility. Strateco has failed to demonstrate that the judge committed a palpable and overriding error. Even if the Court were to find that the government did not expressly indicate to Strateco that social acceptability was a material element for the project’s authorization, the evidence reveals that Strateco had sufficient elements to draw that conclusion itself.