Canadian Manufacturing

Reinterpretation of land claims making Yukon less attractive for investors, study says

Fraser warns territory's experience could be harbinger of uncertainty across country



VANCOUVER—Modern land claim agreements in the Yukon, initially designed to establish legal certainty, were once seen as an advantage in attracting new investment. According to a new Fraser Institute study, however, the agreements are now being undermined by Canadian Courts, causing investors to think twice about pumping money into the territory.

In addition, the study warns that Yukon’s experience could be a harbinger of uncertainty across the country, particularly in British Columbia.

“Unlike the historic treaty agreements of the 1800s, Aboriginal groups and governments today typically devote substantial resources – in time, money and legal counsel – to negotiate comprehensive modern agreements as a means to create legal and economic certainty. But in recent years, the courts have reinterpreted these agreements in a manner that increases uncertainty,” Malcolm Lavoie, the study’s co-author and visiting assistant professor at the University of Alberta Faculty Of Law, said.

The study found in Yukon, for example, courts have forced unforeseen obligations on governments and third-parties beyond the requirements already spelled out in modern treaties, contributing to a drop in investor confidence. The report pointed to the Fraser Institute’s 2014 Survey of Mining Companies, in which 30 per cent of those surveyed said the uncertainty concerning land claims in Yukon either significantly deters or blocks them from investing. Only 12 per cent of those surveyed were so deterred in 2010.

“By creating legal uncertainty, the courts can make Canadian jurisdictions less attractive in the global competition for investment in the natural resource sectors. This unfortunately can stunt economic development and prosperity for aboriginal and non-aboriginal Canadians alike,” Ravina Bains, associate director of aboriginal policy studies at the Fraser Institute, sid.

The study argues “it is possible to provide robust protections for aboriginal rights without creating conditions of legal uncertainty.”

The authors recommend courts not impose obligations that go beyond the express terms of modern land claims agreements, suggesting courts can develop doctrines like the duty to consult in ways that provide better guidance to governments and other parties. They also urge the courts to avoid the dramatic shifts in the jurisprudence that have characterized the past three decades.

“Yukon serves as a measurable example of how legal uncertainty can have negative effects on a jurisdiction’s resource development,” Lavoie said. “If court decisions continue to undermine the certainty created by modern land claims agreements, then the incentives for governments and aboriginal groups to enter into such agreements will be diminished.”

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