May 19, 2020
Case Summary: Fort McKay First Nation v Prosper Petroleum Ltd, 2020 ABCA 163
Overview:
On April 24, 2020 the Alberta Court of Appeal released its decision in Fort McKay First Nation v Prosper Petroleum Ltd, wherein the Court held that Alberta Energy Regulator (AER) is obliged to consider the honour of the Crown when determining whether to approve an application.
Introduction:
This appeal arose out of negotiations that began in 2003 between the Government of Alberta and the Fort McKay First Nation (FMFN) regarding the development of the Moose Lake Access Management Plan (MLAMP) to address the cumulative effects of oil sands development on the First Nation’s Treaty 8 rights.
The Court of Appeal held that the AER has an obligation to consider the honour of the Crown in relation to the ongoing MLAMP negotiations as part of its assessment of the public interest of the Project. The Court concluded that the AER failed to consider the honor of the Crown and overturned the approval of the project. The Court directed the AER to reconsider whether the Project is in the public interest after taking into account the honour of the Crown and how it might be implicated in the MLAMP negotiations.
Background:
Fort McKay, located north of Fort McMurray Alberta, has undergone extensive industry and resource development with 70 percent of the FMFN’s traditional territory leased for oil sand purposes. In 2001, the FMFN began negotiations with the province of Alberta to preserve the Moose Lake area and to develop a Moose Lake Access Management Plan (MLAMP). The Moose Lake Area is part of the First Nation’s traditional territory. The FMFN sought a 10 km buffer zone from oil sand development around the Moose Lake Reserves. In 2015, the Premier of Alberta and the FMFN signed a Letter of Intent to confirm the parties “mutual commitment and interest in an expedited completion of the [MLAMP].” The MLAMP is not finalized and remains the subject of ongoing negotiations between Alberta and the FMFN.
In 2013, Prosper applied to AER for approval of the Project. The Project would be located within the 10 km area buffer zone covered by the MLAMP. In 2018, the AER determined the Project was in the public interest and approved the project subject to authorization by Cabinet. In coming to this decision, the AER declined to consider the MLAMP negotiations, citing a lack of jurisdiction. The AER further found that section 21 of the Responsible Energy Development Act (REDA) prevented it from assessing the adequacy of Crown consultation and that Cabinet was the “most appropriate place for a decision on the need to finalize the MLAMP.”
Alberta Court of Appeal Decision:
At issue on appeal was whether the AER erred by failing to consider the honor of the Crown and refusing to delay the approval of the Project until negotiations between the FMFN and the Government of Alberta relating to the MLAMP were concluded.
In Rio Tinto Alcan Inc. v Carrier Sekani Tribal Council, 2010 SCC 43, the Supreme Court of Canada held that when the enabling statute confers on the tribunal the power to decide questions of law, tribunals also have an implied jurisdiction to decide constitutional issues that are properly before it, absent a clear demonstration that the legislature intended to exclude such jurisdiction. Following the principle in Rinto Tinto, the Court of Appeal held that AER has an implied jurisdiction to consider issues of constitutional law, including the honor of the Crown, as part of its determination of whether Prosper’s application was in in the public interest. Further, AER’s statutory requirement to consider the “public interest” created a duty to apply the Constitution and ensure its decisions comply with s 35 of the Constitution Act, 1982.
The Court found that there was nothing in REDA that prevented AER from considering the MLAMP negotiations in its assessment of the public interest of the Project. Section 21 of REDA states:
The Regulator has no jurisdiction with respect to assessing adequacy of Crown consultation associated with the rights of aboriginal peoples as recognized and affirmed under Part II of the Constitution Act, 1982.
While the AER lacked jurisdiction to assess the adequacy of Crown consultation, “issues of constitutional law outside the parameters of the duty to consult remain within the AER’s jurisdiction, including as they relate to the honour of the Crown.” Moreover, the honor of the Crown is not limited to consultation and can give rise to duties beyond the duty to consult. FMFN argued that the MLAMP process and the Letter of Intent gave rise to additional obligations stemming from the honour of the Crown beyond the duty to consult. The Court of Appeal agreed with the FMFN and held that the issues in this case were not limited to adequacy of Crown consultation and fell within the scope of the public interest mandate:
Section 21 does not prevent the AER from considering relevant matters involving aboriginal peoples when carrying out its mandate to decide if a particular project is in the public interest. The issues raised here are not limited to the adequacy of the consultation on this Project, but raise broader concerns including the Crown’s relationship with the FMFN and matters of reconciliation. These issues engage the public interest and their consideration is not precluded by the language of s 21.
On the issue of deferring consideration surrounding the MLAMP to Cabinet, the Court held that the AER has a statutory obligation to determine whether a proposed project is in the public interest and “is not entitled to decline to address such matters because, in its view, they could be better addressed by Cabinet.” Public interest includes adherences to constitutional principles and considerations of the effect of a project on Aboriginal interests. While these issues may be considered by Cabinet, the Court held that “the AER is no less responsible for considering the Crown’s constitutional obligation than is Cabinet.”
In concurring reasons, Greckol J.A. emphasized that the honour of the Crown is a constitutional principle which governs the relationship between Aboriginal peoples and the Crown, including treaty implementation. The ultimate purpose of the honour of the Crown is to reconcile pre-existing Aboriginal societies with the assertion of Crown sovereignty. Greckol J.A. further confirmed that the right to hunt in a meaningful way contained within Treaty 8 is a solemn promise made by the Crown. Although increased development in Treaty 8 territory may make it more difficult to fulfil, the Crown’s obligation to ensure the meaningful right to hunt under Treaty 8 is an ongoing one.
Greckol J.A. held that “the Crown has long been on notice that the piece-meal approach to addressing FMFN’s concerns through consultation on individual projects has not adequately considered the cumulative effects of development.” She stated that if MLAMP was intended to serve to uphold the Crown’s ongoing constitutional obligation to protect FMFN’s right to hunt, the honour of the Crown would be engaged; these negotiations could not be characterized as mere “policy” discussions. Greckol J.A. further dismissed arguments from Alberta and the proponent that FMFN’s concerns could later be addressed in a treaty infringement claim against the Crown, holding that the honour of the Crown is engaged prior to treaty infringement and seeks to protect Aboriginal rights from being turned into an empty shell. Importantly, she confirmed that the Crown must deal honourably with First Nations in negotiations designed to stave off infringement. Echoing the comments of McLachlin C.J. in Haida Nation v British Columbia (Minister of Forests), Greckol J.A. concluded that the honour of the Crown:
… certainly demands more than allowing the Crown to placate FMFN while its treaty rights careen into obliteration. That is not honourable. And it is not reconciliation.
Significance of Decision:
This decision is significant because it confirms a statutory decision maker’s jurisdiction to consider the honor of the Crown when determining whether a project is in the public interest. The fact that the AER is prohibited from assessing the adequacy of Crown consultation does not mean that the AER can ignore constitutional issues generally, including the honour of the Crown. Justice Greckol’s concurring reasons also provide important guidance on the cumulative effects of development on treaty rights and the accompanying duties of the Crown.
The full decision is linked here.
