Yukon appeal court orders more consultation on Kudz Ze Kayah mine project

The Yukon appeal court has sent a major mining project back to the consultation phase again after finding the territorial and federal governments failed to have proper conversations with Kaska Nation about the project's economic feasibility.

The ruling, issued in writing Friday, closes the latest chapter in what's become a more than two-year-long legal battle over the proposed Kudz Ze Kayah mine and marks another partial victory for Kaska Nation. 

"It's a good news story," Ross River Dena Council (RRDC) Chief Dylan Loblaw said in an interview Monday. 

"It's a win for our nation and you know, we have to stay positive, we have to keep looking forward."

RRDC has been fronting the legal challenges related to Kudz Ze Kayah on behalf of Kaska Nation, first taking the attorney general of Canada and Yukon government to court in 2022 after they approved Kudz Ze Kayah to move into the regulatory phase. 

The mine is set to be located approximately 115 kilometres southeast of Ross River on Kaska traditional territory, in an area that some community members have described as sacred. 

Kaska Nation initially argued that Canada and the Yukon, as "decision bodies," did not adequately consult before issuing the approval. A Yukon Supreme Court judge, however, ruled earlier this year that the Crown had met its consultation obligations except for in the case of a letter submitted by two Kaska First Nations the day before the approval was issued. She ordered that additional consultation take place on that letter alone, after which Canada and the Yukon issued a new approval for the project to move ahead again. 

In the meantime, RRDC filed an appeal that was heard over two days in September, with Kaska Nation alleging major flaws in the Yukon Supreme Court decision while Canada, the Yukon government and project proponent BMC Minerals argued there were no errors. 

Yukon Court of Appeal Justice Susan Griffin, supported by Justices Susan Charlesworth and Bruce Butler, agreed with Kaska Nation Friday that the original decision failed to identify that Canada and the Yukon needed to consult on Kudz Ze Kayah's economic feasibility prior to project approval. 

Kaska First Nations, Griffin wrote, consistently raised concerns about Kudz Ze Kayah's economic feasibility since October 2022, with the project in the vicinity of a number of failed mines. 

"Kaska was asking the broader question: if the mine economics are too uncertain and high risk, and the mine is going to create significant adverse effects, why approve the Project in the first place? Is it even worth it?" Griffin wrote. 

'Deep consultation required dialogue before approval'

Canada and the Yukon refused to consult on that topic, however, with the governments claiming economic feasibility was outside the scope of the Yukon Environmental and Socio-economic Assessment Act (YESAA) process and that consultation could happen during the regulatory phase.

Griffin found that was flawed. 

"Under YESAA and the Decision Bodies' common law duty to consult, Kaska ought to have been permitted a say on what it felt were deficiencies or problems with BMC's projections related to the economic feasibility of the Project. It ought to have been listened to and had its views considered if it had concerns about whether the Project was feasible or too high risk to justify the adverse effects," she wrote. 

Griffin wrote later in her ruling that it "was not enough" for Canada and the Yukon to "simply to listen to Kaska's concerns in this regard and refer it to the regulatory stage, post-approval." 

"Deep consultation required dialogue before approval of the Project," she wrote. 

"The Decision Bodies' refusal to consider this topic meaningfully and engage in dialogue with Kaska before making the decision to approve the Project was unreasonable."

Griffin quashed the new approval for the project and ordered that consultation take place on Kudz Ze Kayah's economic feasibility. She did not give directions about when that had to take place, but noted that "given the length of time consultation has already taken, all the parties should avoid delay in any further consultation."

She dismissed Kaska Nation's two other grounds of appeal — that the original judge was unfairly critical of Kaska Nation's participation in the consultation process, and that she put too many restrictions on how the additional consultation she ordered could take place. 

The Yukon government wasn't immediately available for an interview Monday. 

Allan Nixon, BMC Mineral's vice-president of external affairs, meanwhile, said the company respected "Kaska's desire to have their questions answered by the decision bodies."

"I mean, it delays things for us but we understand and respect the judge's ruling," Nixon said. 

"It's frustrating, absolutely — a delay isn't good for us at any juncture — but at the same time, we want to make sure that all the questions are answered… We want to see this very thorough process completed so we can move forward."