Canadian Lawyer InHouse

37 CANADIANLAWYERMAG.COM/INHOUSE JULY 2015 I n d u s t r y S p o t l i g h t or even a semi defi nitive view on how this is all going to work together?" He adds: "Decisions are being made to fo- cus [investment] resources elsewhere other than in Canada. It would be unfair to say that it's simply the aboriginal issues, but the ab- original issues are a big factor . . . Companies are coming to the conclusion that, relatively speaking, there are more certain investment environments than the one that we are presently dealing with. I won't say that it's a mad rush to the door, but I am aware of some dampening." The Mount Polley accident, where the breach of a tailings pond caused an envi- ronmental disaster, will also affect the mining sector as companies respond to tougher regulations. "Mining companies on an operational ba- sis are adjusting, as any responsible operator would be, to the outcome of that incident, whatever that will be," says Cassidy, not- ing that the disaster is still under investiga- tion. "Both of these factors [Tsilhqot'in and Mount Polley] are being taken into account in capital markets and in the offshore inves- tor world and at operational levels." A lawyer with a re- source company active in British Columbia says Tsilhqot'in heightens the need for companies to have First Nations on side as they formulate their development plans. "There was always a need to at least try and negotiate with aboriginal groups, even if it wasn't legally required, but I think now it's becoming a requirement," he says. "You have to have a strong showing of First Nation support if your projects are going to be successful." The lawyer, who asked not to be named because it would violate company policy, highlighted the possibility of future title claims that could delay projects, perhaps for years. "What we are seeing is that groups are . . . taking the pieces out of Tsilhqot'in that are favourable to their views without recognizing the years and years of litigation involved," he says. "Groups that have not gone out through the courts and proven title are just declaring title as a fact." Yet not everyone sees Tsilhqot'in and Mount Polley as the main factors behind the investment slowdown in the resource sector. "These cases are very important in the Canadian legal landscape, but absolutely we do not believe they are hindering, or dampening or pushing away investment in the mining industry in Canada," says Dawn Whittaker, Canadian leader of the mining and commodities practice at Norton Rose Fulbright Canada LLP. "What is having a signifi cant impact is the capital markets and the inability of mining companies, particularly junior exploration companies, to have access to capital. That is the real issue, I think." She adds: "It's not these aboriginal or en- vironmental decisions that will drive invest- ment, it's the capital markets. If the capital markets are good there's much more oppor- tunity for mining companies to work with aboriginal groups to come to mutually satis- factory arrangements. It's a win-win. When the capital markets are in the challenging times that they are now, unfortunately it's not a win-win for anybody." Whittaker says she is more concerned about the Ontario Environmental Review Tribunal's 2013 Northstar ruling that made directors personally responsible for the cleanup of a polluted parcel of land. "There's a fair bit of concern that that could have a chilling effect on some invest- ment in Canada," she says. "When capital markets are down people have to look to alternative sources of fi nancing, and that includes things like private equity, which the mining industry has always been hop- ing would jump into Canada. Private equity is going to want their representatives on the board, and if you give them an overview of the law and what the potential liabilities are, telling an investor who sits on a board that they may suffer millions of dollars in per- sonal liability has a fairly chilling effect." IH '' '' You have to have a strong showing of First Nation support if your projects are going to be successful. THOMAS ISAAC, Osler Hoskin & Harcourt LLP

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