There has been a great deal of media attention to the federal government's recent passage of Bill C-5 – the Building Canada Act – intended to expedite projects designated as in the "national interest". BC and Ontario have also passed similar legislation.1 Many Indigenous leaders' responses have been swift and strong, stating unequivocally that such projects cannot proceed without their consent. This raises the thorny but important question of whether these projects will in fact require Indigenous consent to proceed.
On June 3, 2025 federal Minister of Justice and Attorney General Sean Fraser appeared to answer that question, stating Indigenous groups do not possess a blanket veto. But he immediately backtracked and while noting his "innocent intentions" he apologized the next day for "caus[ing] hurt and potentially erod[ing] a very precarious trust".2
What then does this mean for companies looking to advance "nation building" projects in Canada? Did the Justice Minister misspeak the law?
The short answer is no. Under Canada's constitutional framework for protecting Indigenous rights, governments are required to consult Indigenous groups with a view to accommodating their interests and reasonably balancing them with larger societal needs. But the Supreme Court of Canada has repeatedly held that this does not amount to giving Indigenous rights holders a veto. The law requires a balancing of indigenous and non-indigenous interests.
"This process does not give Aboriginal groups a veto over what can be done with land pending final proof of the claim. The Aboriginal "consent" spoken of in Delgamuukw is appropriate only in cases of established rights, and then by no means in every case. Rather, what is required is a process of balancing interests, of give and take."3
What about the federal United Nations Declaration on the Rights of Indigenous Peoples Act, which is directed at implementing the United Nations Declaration on the Rights of Indigenous Peoples ("UNDRIP")? Does the language of UNDRIP article 32 requiring Indigenous free, prior, and informed consent to projects affecting Indigenous lands and territories – or article 26 acknowledging Indigenous rights to own lands and resources they have traditionally occupied – not confer a veto?
Legal experts have expressed different views on whether the language of UNDRIP equates to an Indigenous veto, but more important for present purposes is the fact that the UNDRIP articles are not the law of Canada. Despite the lofty preamble to the act (preambles are not legally binding), and contrary to common belief, the act does not make the UNDRIP the law of Canada. Instead, it contains forward looking commitments intended to "align" Canada's laws with the UNDRIP in future. And even that concept is set to be tested in court in a constitutional challenge being brought against BC's similar Declaration on the Rights of Indigenous Peoples Act ("DRIPA"). That pending challenge includes the argument (among others) that one Parliament cannot bind future Parliaments as to which laws they may or may not pass.4
What about the worry that Indigenous groups may "tie up" projects in court, or that the governments typically lose cases when Indigenous groups challenge approvals after the fact? The reality is that bringing a legal challenge does not suspend authorized permits or decision-making, injunctions are difficult to obtain, and governments do not always lose challenges based on the adequacy of consultation. The outcome depends on whether the government has done a proper job consulting.
But this is of course only part of the issue. There is a separate and important question of whether Indigenous support is needed from a practical, political and investment perspective – and if so, how unanimous must it be. What proponents – or even taxpayers – will want to spend money on a project that faces broad opposition from interested Indigenous groups irrespective of the legalities? Who will want to lend money to finance them? And is the risk of disruption through legal challenge (even if it's less than commonly thought) not still a major concern?
These are serious and legitimate questions that are not eliminated by the absence of an Indigenous legal veto. Fortunately for proponents, there are now more ways than ever to find constructive and mutually beneficial ways to explore and seek Indigenous support. These include ensuring jobs and contracting opportunities for Indigenous communities, sharing financial benefits, and growing opportunities for Indigenous equity (co-ownership) supported by various federal and provincial loan guarantee and funding programs. These include the $10 billion in loan guarantees administered by the Canada Indigenous Loan Guarantee Corporation.5
All the above means that proponents and investors must take a more nuanced view on the question of whether Indigenous consent is required. Because many "nation building projects" will likely fall somewhere between unanimous Indigenous opposition and unanimous Indigenous consent. Such cases will require extensive consultations and negotiations, and such negotiations are more likely to proceed effectively if the parties acknowledge openly, and respectfully, that none of them alone holds all the cards. In such a reality, making every reasonable effort to find agreement to the greatest extent possible is in the interest of all parties and in Canada's national interest. To quote the Supreme Court of Canada, "[i]n summary, in developing vast tracts of land, the government is expected to consider the economic well-being of all Canadians. But the aboriginal peoples must not be forgotten in this equation."6
Footnotes
1. Infrastructure Projects Act, SBC 2015, c 13 and Protect Ontario by Unleashing our Economy Act, 2025, SO 2025, c 4
2. Minister says his comments on Indigenous consultation 'eroded' trust – National | Globalnews.ca
3. Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73
4. This challenge is being brought by the Pender Harbour and Area Residents Association. The authors are counsel to PHARA in this matter and the petition to the court can be found here.
5. Indigenous Loan Guarantee Program | CDEV
6. Delgamuukw v. British Columbia, [1997] 3 S.C.R. 1010 at para. 204
The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.
© McMillan LLP 2025
