Teal Cedar Products Ltd. (Teal) challenged British Columbia’s Haida Gwaii Land Use Objectives Order (the “Order”) pertaining to forestry management on Haida Gwaii. Teal argued its timber agreements were undermined by the Province’s efforts to advance reconciliation, which Teal characterized as a factor “extraneous” to its agreements. But in Teal Cedar Products Ltd. v. British Columbia, 2025 BCSC 595, the Court rejected this claim. The Province acted within its statutory discretion to protect Aboriginal rights and interests by setting land use objectives. Managing Crown lands to give effect to Aboriginal interests was not a breach of the Province’s duty of good faith to Teal. Rather, the legislation and the agreements were part of a broader framework which includes constitutional recognition of Aboriginal rights. Provincial decision-makers have a duty to act to protect Aboriginal interests. The Court’s decision demonstrates the protection of Aboriginal interests as an integral component of the Province’s authority over forestry management.
Background: Teal operated two forestry tenures on Haida Gwaii. In 2010, the Province enacted the Order, developed through government-to-government negotiations with the Haida Nation and aimed at protecting ecological and cultural values on Haida Gwaii. Later, in 2012, the allowable annual cut (AAC) across the region was significantly reduced based on the Order’s application. Teal asserted that changes to the AAC made it increasingly difficult to locate timber for harvest. Teal’s management formed the opinion that it could not operate the tenures profitably and sold its operations on Haida Gwaii.
Teal sought damages from the Province, advancing its claim on three grounds: (1) a breach of the duty of good faith, (2) a constructive taking, and (3) a breach of the promise to keep Teal whole. Justice Brown dismissed all three of Teal’s arguments. Justice Brown rejected the first claim, that the Province breached its duty of good faith. Below we explore how the court’s reasoning supports the Crown’s ability to account for and protect Aboriginal interests.
Duty of Good Faith: Teal argued that the Order was motivated by reconciliation efforts with the Haida Nation, an objective Teal characterized as extraneous to the purpose of its forestry tenure agreements. Relying on Wastech Services Ltd. v Greater Vancouver Sewerage and Drainage District, 2021 SCC 7 (Wastech), Teal argued the Province breached a duty to exercise contractual discretion in good faith when it passed the Order. In Wastech, the Supreme Court of Canada described the duty as breached where the discretion is exercised unreasonably, meaning “in a manner unconnected to the purposes of the underlying discretion” (Wastech, para. 4).
Justice Brown declined to apply Wastech, as Teal mischaracterized the nature of the Province’s discretion; it derived from statutory authority and not from the tenure agreements. Section 93.4 of the Land Act, RSBC 1996, c. 245, provides that, “…For the purposes of the Forest and Range Practices Act, the minister by order may establish objectives for the use and management of…(b) Crown land….” In addition, the Province’s authority to alter the AAC is set out in sections 8 and 8.1 of theForest Act, RSBC 1996, c. 157.
Although Wastech was inapplicable, Justice Brown considered whether the Province passing the Order was “extraneous” to the underlying purposes of the tenure agreements. The Court found that the tenure agreements operated within a broader statutory and regulatory framework that includes the Constitution Act, 1982. Constitutional recognition and protection or Aboriginal rights and interests are aspects of reconciliation.
Further, the tenure agreements themselves expressly referenced the Province’s authority to consider and accommodate the impacts of harvesting as it pertains to Aboriginal rights. These provisions of the tenures were substantially identical to those examined by the Supreme Court of Canada in Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73 (Haida). InHaida, the Court affirmed the government’s authority (and duty) to modify forestry management tools to fulfill its obligation to consult and accommodate with respect to Aboriginal interests.
Given the tenure agreements, the legislation, and the case law addressing the need for recognition and protection of Aboriginal interests and rights, reconciliation was not extraneous to the tenure agreements at issue. The decision thus makes it clear that provincial decision-makers may account for Aboriginal interests as part of resource management schemes.
Significance of the decision: Reconciliation is not extraneous to resource agreements under BC’s statutory forestry framework. By finding reconciliation embedded in the forestry framework, and also reflected in the tenure agreements themselves, the Court confirmed the Crown may and must take Aboriginal rights into account when making resource management decisions.
More fundamentally, reconciliation’s importance lies in the fact that the resources which the Crown has been giving away to industrial interests, without an underlying treaty, are resources from unceded territories properly owned and governed by Indigenous peoples. As the BC Supreme Court has recognized, the doctrines by which the Crown “acquired” sovereignty over and ownership of provincial lands, at the expense of Indigenous peoples, “is simply a legal fiction to justify the de facto seizure and control of the land and resources formerly owned by the original inhabitants of what is now Canada” (2022 BCSC 15 at para. 198).
Teal Cedar Products Ltd. v. British Columbia, 2025 BCSC 595
Amanda Nurse