by JoAnn P. Jamieson and Michelle Tremblay, Student-at-law
Earlier this
year, the Alberta Court of Appeal released its decision in Fort
McKay First Nation v Prosper Petroleum Ltd., 2020 ABCA 163 (“Prosper”) holding that the Alberta
Energy Regulator (“AER”) is required
to consider the honour of the Crown when determining whether the Prosper
Petroleum oil sands project is in the public interest. The AER is now meeting
with the parties to determine the scope of a redetermination hearing,[1]
anticipated to be held in the spring, 2021.[2]
What is the “Honour of the Crown”?
Canadian courts
have long held that the “honour of the Crown” is a constitutional principle
that governs the relationship between the Crown and Aboriginal peoples. The ultimate purpose of the principle is to
reconcile pre-existing Aboriginal interests with the assertion of Crown
sovereignty dating as far back as the Royal
Proclamation, 1763.
The honour of
the Crown gives rise to a number of duties and obligations including:
·
a fiduciary duty when the Crown
assumes discretionary control over a specific Aboriginal interest;
·
the Crown’s duty to consult
when the Crown contemplates an action that will affect a claimed but unproven
Aboriginal interest under section 35 of the Constitution
Act, 1982;
·
a requirement that the Crown
act in a way that accomplishes the intended purposes of treaty and statutory
grants to Aboriginal peoples; and
·
a principle governing
treaty-making and implementation, which includes honourable negotiation
practices and the avoidance of sharp dealings.
To date, the
honour of the Crown has generally been raised in the context of regulatory
proceedings to argue that the duty to consult has been triggered and that the tribunal
must take steps to adequately fulfill the duty. In Prosper, the AER was asked to consider the honour of the Crown in the
context of determining whether the proposed oil sands project was in the public
interest.
Background to Prosper Case
The Fort McKay
First Nation (“FMFN”) holds treaty rights to hunt, fish, and trap within
the Moose Lake Area that forms part of its traditional territory. The FMFN has
long been concerned about preserving its ability to exercise its Treaty 8 rights
as over 70% of its traditional territory is leased for oil sands purposes.
In 2003,
negotiations began between the Government of Alberta and the FMFN to obtain
protection for the Moose Lake Area in order to address the cumulative effects
on FMFN’s treaty rights. It was envisioned that the resulting Moose Lake Area
Management Plan (“MLAMP”) would be adopted as a sub-plan
under the Lower Athabasca Regional Plan (“LARP”). These negotiations were eventually
put on hold while LARP was negotiated and implemented.
As part of the
LARP process, FMFN sought a 10 km buffer zone around its Moose Lake Reserve,
which was later rejected by the Government of Alberta. As part of a formal review of the LARP, the
review committee found that the plan failed to take adequate measures to
protect the FMFN’s treaty rights. This report revived the MLAMP negotiations,
with Premier Prentice and Chief Boucher signing a Letter of Intent in 2015 with
a commitment to expedite the completion of the MLAMP.
The AER Decision
In 2013, Prosper
applied for the Rigel bitumen recovery project located within 5 kilometers of
the FMFN’s Moose Lake Reserve. On May 6, 2016, the AER suspended its
consideration of the application due to resumption of the MLAMP
negotiations. On November 6, 2016, the
AER resumed processing the application on the basis that finalization of the
MLAMP remained uncertain.
In January,
2018, the AER held a public hearing to consider the application, which the FMFN
fully participated in. The FMFN requested the application be denied because of
its location within the 10 km buffer and because the MLAMP was still not in
place.
The AER approved
the Rigel project in June, 2018. In its
written reasons, the AER found the project to be in the public interest when
impacts to treaty rights were weighed against other social, economic and
environmental rights. The AER declined
to consider the MLAMP negotiations contemplating the 10 km buffer and whether
the negotiations implicated the honour of the Crown for a number of reasons
including that section 21 of the Responsible
Energy Development Act (“REDA”) precluded
it from considering the adequacy of Crown consultation.
The Court of Appeal Decision
On appeal, the
majority of the Court found that the AER, as a public agency, has a general
duty to apply the Constitution Act, 1982
and that this duty extends to ensuring that its decision complies with section
35, which explicitly protects and upholds Aboriginal and treaty rights. The
Court reiterate the finding from Clyde River[3]
wherein the Supreme Court of Canada determined that:
[A]
project authorization that breaches constitutionally protected aboriginal and
treaty rights of Indigenous peoples cannot be in the public interest.[4]
Further, the
Court found that section 21 of REDA does not carve out the AER’s jurisdiction
to consider constitutional law issues, including the honour of the Crown. Section 21 of REDA reads:
The
Regulator has no jurisdiction with respect to assessing the adequacy of
Crown consultation associated with the rights of aboriginal peoples as
recognized and affirmed under Part II of the Constitution Act. [Emphasis added.]
Accordingly,
while the AER does not have jurisdiction to determine the adequacy of Crown
consultation pursuant to section 21,
the AER does have a broad implied jurisdiction to consider the honour of the
Crown and whether or not it was engaged. In the case before it, the AER was
required to address the honour of the Crown as part of its consideration of
whether the Rigel project was in the public interest giving credence to the specific
context of the MLAMP negotiations.
Further, the AER
incorrectly determined the MLAMP to be encompassed by the larger regional plan,
which would prevent the AER from taking into consideration the ongoing MLAMP
negotiation process. Finally, the Court held that the AER could not defer the
consideration of these issues to Cabinet as the AER is no less lawfully
responsible for considering this matter than is Cabinet.
In the result, the
Court granted the appeal and held that the AER is required to consider the
MLAMP process as part of its assessment of the public interest.
Additionally, Greckol
JA proffered a concurring judgment that offers guidance on how the implementation
of treaties engages the honour of the Crown. Greckol found that the 2015 Letter
of Intent signed by Premier Prentice supporting the negotiation of the MLAMP
fell within treaty implementation as it was designed to ensure fulfillment of
the Crown’s obligations. The obligation here was the FMFN’s ongoing right to
hunt under Treaty 8, which requires negotiation and just settlement of disputes
outside the context of individual projects. This is required in order to
address the cumulative effects of land development on First Nation treaty
rights.
Implications of the Case
The Prosper case
affirms that treaty implementation is a contemporaneous issue spanning across
all Canadian jurisdictions and decision-making processes. In particular, the decision
sheds light on the obligation of a tribunal to consider the honour of the Crown
in its decision-making process unless expressly carved out by governing
legislation.
Going forward, the AER
and other tribunals must be mindful of the ways in which its obligation to
uphold the Constitution Act, 1982 may
impact consideration of whether an individual project is in the public
interest. As such, this case may pave a new way for Indigenous groups to hold
governments, and their regulatory tribunals, accountable for implementation of
treaty obligations.
Should you have any questions regarding the information outlined above, please feel free to contact JoAnn P. Jamieson or Michelle Tremblay, Student-at-law. Alternatively, you can also contact any member of our Energy, Environmental and Regulatory practice group.
[1] Fort McKay First Nation, “Prosper Rigel Project and the
Re-determination Hearing”, Red River Current (November 2020), online
(pdf): <https://www.fortmckay.com/app/uploads/2020/11/november-2020.pdf>.
[2] Alberta Energy Regulator, “Application 1778538 Notice of Hearing –
Prosper Rigel Project” (28 July 2020), online:
<https://www.aer.ca/regulating-development/project-application/notices/application-1778538-hrg>.
[3] Clyde River (Hamlet) v. Petroleum Geo-Services Inc., 2017
SCC 40 (Clyde River).
[4] Ibid at 40.
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