Canada’s international treaty obligations must not restrict Canada’s ability to honour its obligations to Indigenous peoples. However, Indigenous peoples have longstanding concerns about conflicts between Canadian trade and investment treaty commitments and these obligations, especially commitments to protect foreign investors in Canada. For example, the Crown must consult with and possibly accommodate an Indigenous people or group if a project might affect the group’s asserted or proven rights. Government actions to impose new project approval requirements to fulfill these requirements might conflict with the NAFTA obligation to provide “fair and equitable treatment” to US project investors if they cause serious delays or additional expenses related to the project’s approval or cause its cancellation. The new Canada-United States-Mexico Agreement (CUSMA) is the first Canadian treaty to address this kind of conflict through a general exception for state actions taken to fulfill legal obligations to Indigenous peoples.

The language of this new “Indigenous General Exception” borrows heavily from exceptions in the WTO’s General Agreement on Tariffs and Trade regarding national security measures and measures to achieve public policy goals like the protection of health and the environment. In “Indigenous Rights and Trade Obligations:  How does CUSMA’s Indigenous General Exception apply to Canada?”, we employ WTO’s dispute settlement panels’ and the Appellate Body’s analytical approach to these WTO exceptions to analyze the Indigenous General Exception. We conclude that this exception is likely to afford Canada broad, but not unlimited, discretion to determine what its legal obligations require. To rely on the exception, Canada would have to act in good faith. Showing good faith would require Canada to describe its specific obligation to an Indigenous group and explain how Canadian actions fulfilled it. Canada would also have to show that its actions do not constitute “arbitrary or unjustified discrimination” or a “disguised restriction” on trade in goods, services, and investment.

Canada’s reliance on the exception in a particular case could be challenged by the US or Mexico through the CUSMA dispute settlement process if these criteria are alleged not to be satisfied. However, a CUSMA panel adjudication raises concerns about whether panel members are well suited to decide inevitably complex questions related to Canada’s legal obligations to Indigenous groups. Most panel members are likely to be non-Canadians with little expertise regarding Canada’s obligations to Indigenous peoples. Affected Indigenous groups have no guaranteed right to participate. Additionally, the exception’s requirements would constrain Canada in fulfilling its obligations. The extensive, complex, and, in many cases, evolving and contested nature of these obligations, however, means that Canada needs flexibility. Despite factors that mitigate the risks associated with USMCA panel adjudication, adjudicating whether the exception is available could risk damaging consequences for Canada’s delicate relationship with Indigenous peoples.

J Anthony Vanduzer and Melanie Mallet were recently awarded the inaugural Charles B. Bourne Article Prize from the Canadian Yearbook of International Law/Annuaire canadien de droit international for “Indigenous Rights and Trade Obligations: How Does CUSMA’s Indigenous General Exception Apply to Canada?“.