Alberta Streamlines Regulatory Process for Wetland Replacement Works

By Sean Parker and Kyle Trolley, Student-at-Law

Effective as of December 23, 2020, the Water (Ministerial) Regulation, AR 205/98 (the “Regulation”) has been amended and now references a new Code of Practice for Wetland Replacement Works (the “COP”), developed by Alberta Environment and Parks (“AEP”). The COP is a red tape reduction measure implemented by AEP. It is intended to streamline the regulatory process for proponents seeking to restore or construct wetlands. The COP replaces requirements previously under the Water Act, RSA 2000, c W-3 (the “Water Act”) to obtain an “approval” with a less onerous notice process for activities that meet the requirements set out in the COP.[1]

The idea is to eliminate wait times for proponents seeking to restore or construct wetlands. Under the new scheme, 14 days’ notice must be given prior to commencing a wetland replacement activity; proponents will no longer have to wait for the regulator to issue an approval under the Water Act.

In 2019, AEP began the design and development of its Wetland Replacement Program (the “WRP”). The WRP aimed to “re-establish wetlands in partnership with Albertans by providing resources for collaborative replacement projects across the province.”[2] To date, the program has funded seven projects across the province equating to $3.7 million, and resulted in the restoration and or construction of 158.23 hectares of wetland.[3]

By implementing changes through the Regulation and the COP, AEP is intending to “increase participation in conservation offset programs, accelerate the addition of wetlands on the landscape, and to stimulate Alberta’s economy by creating the right regulatory and economic conditions for wetland replacement proponents.”[4]

The Regulation states that the placing, constructing, operating, installing, maintaining, removing or disturbing of wetland replacement works, as defined by the COP, are designated activities that do not require approval so long as they are commenced, continued, and carried out in accordance with the COP.[5]

The COP defines wetland replacement works as “any structure or technique used for wetland construction or wetland restoration.”[6] Wetland replacement works include a structure, contouring, erosion and sediment control, soil amendments, vegetation amendments, decommissioning of subsurface drainage works, or drilling and reclaiming a borehole in a wetland replacement area.[7]

“Wetland construction” is defined in the COP as “the manipulation of the physical, chemical, biological or hydrological characteristics of a site with the goal of creating a wetland replacement area at a location that was non-wetland.”[8] The wetland replacement area must also have:

                           i.          a storage capacity less than or equal to 6,250 cubic metres;

                         ii.          an average depth of water, being the ratio of the volume of a wetland to the surface area of the wetland at design full capacity, of at least 10 centimetres but no more than 60 centimetres under normal hydrologic conditions;

                       iii.          a maximum depth of water of 2 metres; and

                       iv.          a 1:100 year flood magnitude of less than or equal to 1.5 cubic metres per second at an outlet.[9]

“Wetland restoration” is defined in the COP as “any manipulation of the physical, chemical, biological or hydrological characteristics of a wetland, that has been partially or completely lost by drainage, infilling or other forms of degradation or impairment, with the goal of re-establishing the pre-disturbance area, natural drainage pattern, hydrology and natural processes.”[10] Wetland restoration only applies to wetlands which have

                           i.          a catchment area less than or equal to 300 hectares in size; and

                         ii.          a 1:100 year flood magnitude of less than or equal to 1.5 cubic metres per second at an outlet.[11]

With no requirement for a formal approval, once notice is given of a wetland construction or restoration project captured under the COP, work can begin. However, any activity related to wetland replacement works that is beyond the scope of the COP will still require approval pursuant to the Water Act.

The new COP for wetland replacement and construction adds to the roster of codes implemented by AEP. These codes streamline the regulatory process for activities considered to have a low potential for adversely affecting the environment. If successful, the new COP will speed up the process for proponents, and also allow AEP personnel to focus on other matters that have the potential for greater environmental impacts.

For information on how the new COP for wetland replacement and construction may impact your business or operation, please contact Sean Parker in Edmonton, Michael Barbero in Calgary or another member of our Energy, Environmental and Regulatory practice group.

---

[1] Government of Alberta, “New Water Act Code of Practice for Wetland Replacement Works”, January 2021, https://aia.in1touch.org/document/5734/External_Notice_COP_Wetland_Replacement_Works.pdf, (”GOA Fact Sheet”).

[2] Alberta Environment and Parks, “AEP’s Wetlands Replacement Program restores nearly 160 hectare of wetland in Alberta”, January 23, 2021, https://albertaep.wordpress.com/, (“AEP Program”)

[3] AEP Program.

[4] GOA Fact Sheet.

[5] Section 3(9), Water (Ministerial) Regulation, AR 205/98, (the “Regulation”).

[6] Section 1(2)(nn), Code of Practice for Wetland Replacement Works, (“COP”).

[7] Section 1(2)(nn), COP.

[8] Section 1(2)(kk), COP

[9] Section 1(2)(kk), COP.

[10] Section 1(2)(oo), COP.

[11] Section 1(2)(oo), COP.

Smile, You’re on Camera: Alberta Environmental and Regulatory Hearings During COVID

 By Sean Parker, Cesar Agudelo and Marika Cherkawsky

Since the onset of the COVID pandemic and implementation of various workplace and other restrictions, we have learned to adapt as we serve our clients. While not without its challenges, our lawyers and staff have embraced the various procedural and other modifications initiated by the courts and regulatory tribunals in Alberta.

Our Energy, Environmental and Regulatory practice group has gained significant experience in navigating the modified processes for things such as filings, virtual hearings and online etiquette. As we enter a new year with continued modified processes, the discussion below outlines some noteworthy procedures applicable to regulatory matters.

Filing and Other Procedural Changes

Court of Queen’s Bench

Since March 30, 2020, the courthouse has restricted in-person access. As 2020 progressed and the Court moved to online filing and hearings, in-person access was further discouraged. Now parties, especially those represented by counsel, must file online unless it is necessary to file a hard copy, in which case parties must use the drop boxes provided by the Court. It appears that filing at the clerk’s desk is now limited to unrepresented litigants.

There are a number of specific requirements for online filing with the Court, but they can be grouped in two major categories:

1. Emails must follow naming conventions. These change depend on the type of filing and it is best to contact counsel or follow the instructions available at this link.
2. Documents must follow certain formats, including the requirement that each filed documents be sent as a separate, “bookmarked” PDF, rather than in one large scan.

Once a document is filed, the court clerks will return the filed copy with an electronic stamp. Processing times vary, but the date of filing should reflect the date in which the document was sent, unless it was submitted after 4 p.m., in which case it will have the next day’s date. Although this is the general process and the Court has made substantial efforts to adapt, the system is not perfect. In our experience, at times it has taken several weeks or even months to have filed documents returned. This can create issues, for example, when facing a limitation period and a filed copy of the document is needed in short order. Accordingly, we recommend submitting documents for electronic filing well in advance of any deadlines to avoid problems.

In addition, when making an application to be heard by a Master or a Justice in chambers, a draft order providing the relief sought must be submitted along with any documents that may be referenced or relied on during the application. This may include your pleadings, previous affidavits as well as the application and the affidavit in support. In essence, you must provide all documents relevant to the application at the same time so they can be uploaded for the hearing and the Master or a Justice has them at her fingertips. At in-person hearings, there was often an opportunity to pass documents up to the Master or a Justice. That is not possible at an online hearing and consideration should be given as to what documents and information may be required.

Additional information on filing and other requirements can be found on the Court of Queen’s Bench website by following this link.

Alberta Utilities Commission

Following the first lockdown, the Alberta Utilities Commission (“AUC”) closed its offices in Calgary and Edmonton and its employees began to work from home. Part of its response also involved deferring all public hearings until further notice. Since then, the AUC has exercised its discretion under Rule 001: Rules of Practice and the Alberta Utilities Commission Act, to hold its hearings orally or in writing and begun to schedule virtual oral hearings or hearings by written submission only. The written hearing process provides parties an opportunity to file written evidence and written argument.

Since March 2020, the AUC has issued notice of written hearings for twelve proceedings and notice of virtual oral hearings for three proceedings. Information on online hearings including scheduling and other matters can be found on the AUC website by following this link, under the “Impacted Proceeding Timetable” tab.

The COVID-19 response also involved interim changes to the AUC participation involvement program (“PIP”) and related information requirements. These changes include:

• The principles of effective PIP set out in appendixes A1 and A2 of Rule 007 and in Section 2 of Rule 020 continue to apply with two important adjustments:
• First, project proponents must give stakeholders a minimum of 30 days to receive, consider and respond to project notifications.
• Second, proponents are discouraged from implementing face-to-face consultations, and should not engage in public open houses or town hall meetings. Electronic means of communication for consultation purposes are recognized and encouraged.
• The Commission has indicated the project proponents should recognize the challenges Indigenous groups may have at this time and adapt practices and timing accordingly.
• Facility applications will not require applicants to provide mailing labels for stakeholders until further notice. Instead, proponents must file an Excel spreadsheet with their application that lists stakeholder contact information with columns for name, company name, address 1, address 2, province, postal code, and country.

Alberta Energy Regulator

The Alberta Energy Regulator (“AER”) announced moderate changes to its operations and continued to respond to energy related incidents 24 hours a day. A deferral of certain reporting and monitoring requirements was implemented in the spring of 2020, however those obligations resumed on July 15, 2020. Since March 17, 2020, meetings with stakeholders and oral portions of hearings have been held virtually.

Of note, the AER’s virtual hearings have been live-streamed on their YouTube channel. To see how this process works, the recent hearing on the Grassy Mountain Coal Mine Project can be viewed in the following link.

Canada Energy Regulator

The Canada Energy Regulator (“CER”) moved all oral portions of hearing to a virtual format, and meetings with CER staff are being held via videoconference or conference telephone. The CER continued to conduct verification activities, though modified to comply with social distancing requirements. In terms of filing, the CER encouraged e-filing and postponed the filing of hard copy documents until further notice. Additional information on the CER’s current procedures can be found at the following link.

Other Regulatory Tribunals

Some regulatory tribunals have not announced special COVID procedures of general application for their proceedings. For example, the Environmental Appeals Board and the Public Lands Appeal Board appear to be taking a case-by-case approach and have been holding hearings online or by written submissions only.

Courtroom and Hearing Etiquette

One of the most significant changes to environmental and regulatory proceedings spurred by the pandemic restriction is the move to virtual hearings. This new format presents some challenges, but it may have also ushered welcomed and long-awaited changes to the way courts and regulators conducted hearings.

As mentioned above, one notable change was the public streaming of the AER hearing for the Grassy Mountain Coal Project on YouTube. Public broadcast of hearings is not something new in Canada, for example Supreme Court hearings have been televised for several years. A significant difference, however, is that the recent online broadcast of hearings held on a video conference platform such as Zoom often gives the public access not just to what is being said, but also to the documents being presented.

Given that hearings such as the one for Grassy Mountain would have typically been held at a location near the project site, the new online format may have the effect of increasing accessibility, and likely reduced travel costs and other expenses. There is support to maintain changes such as this beyond the pandemic.

Along with advantages of reduced costs and increased accessibility, there are still challenges with conducting legal proceedings by videoconference.

First, a good internet connection is key. These hearings use a lot of bandwidth due to the number of participants and video streaming. It may not be uncommon for there to be 10 or 20 hearing participants all on the videoconference at the same time.

Second, it is important to invest in good audio-visual equipment. As some of our lawyers have experienced, headphones and computer cameras that we rarely used before the pandemic, have now become important tools of the trade. Some of us have gone through a number of headphones to find the right one and to ensure there is little feedback and the microphone neatly captures the speaker’s voice without background noise.

Third, and related to the second point above, where you decide to sit and what you wear for your virtual hearing can affect the effectiveness of your submissions. Sitting in a room with a loud HVAC or against bright lighting can negatively affect your appearance. Court reporters rely on a clear sound and visual cues to capture what is being said. Further, it is recommended to wear solid, understated coloured clothing to prevent odd appearances that may occur on the videoconference platform. Ensure that you are in a location where you will not be interrupted, there is little to no background noise, and you have good lighting that clearly shows your face. This will help the decision maker understand your submissions and keep the record clear.

Fourth, virtual hearings require that you prepare your documents ahead of time, and that you know exactly which page numbers you will reference. Depending on the type of hearing, the party presenting may be in control of the documents, or someone else may be. In Court, for example, the party making submissions may be able to share their screen with the Court.

In the recent Grassy Mountain hearing before the AER, however, the videoconference host had control of the documents. In these situations, it is advisable to discuss with the host ahead of time the documents that will be referenced so they can have them open and ready to share.

Furthermore, keep in mind that many of the documents that are shared in virtual hearings are in PDF format. Accordingly, it is important to be clear about which pages are being referenced as the page numbers on the document may not match the PDF number. Also, tabs for exhibits are not as easily followed unless “bookmarked” in the electronic document.

Finally, it is advisable to do a dry run before the hearing. Test your equipment and location, check that everyone has the same electronic documents and page numbers, and check and double check the specific procedures of the hearing.

For additional information on how to prepare for your virtual hearing, contact Sean Parker in Edmonton, Michael Barbero in Calgary or another member of our Energy., Environmental and Regulatory Practice Group.

Alberta Court of Appeal Rules on the new “NORM” for Standing Before the Environmental Appeals Board

by Sean Parker and Kyle Trolley, Student-at-Law

Introduction

On Friday December 11, 2020, the Alberta Court of Appeal released its decision in Normtek Radiation Services Ltd v Alberta Environmental Appeal Board, 2020 ABCA 456 (“Normtek v EAB”) where it overturned a Court of Queen’s Bench judicial review ruling[1] that upheld a decision by the Environmental Appeal Board (the “Board”) where an appeal was dismissed on the basis that the appellant, Normtek Radiation Services Ltd. (“Normtek”), lacked standing as it failed to show that it was “directly affected” by the administrative decision under review.[2] This is a significant decision by the Court of Appeal as it potentially expands the test for standing before the Board to include parties who’s economic interests may be affected even if not directly tied to an environmental impact.  In addition, this decision has the potential to expand the scope of a hearing on the preliminary issue of standing before the Board; essentially requiring an analysis of the merits of an appeal if connected to an appellant’s position on how it may be “directly affected” by the decision being challenged.

Background

The appellant, Normtek, operates a specialized business that transports and disposes of naturally occurring radioactive material (“NORM”), which can accumulate as a waste product of oil and gas extraction and production operations.

Secure Energy Services Inc. (“Secure Energy”), brought an application to the Director of Alberta Environment and Parks (the “Director”) for an amended approval that would permit Secure Energy to dispose of NORM at its Pembina landfill northwest of Drayton Valley.[3] Normtek responded to Secure Energy’s application by submitting a statement of concern to the Director arguing that Secure Energy’s application was contrary to international and national guidelines, and the Director’s decision should await the development of appropriate waste classification criteria for NORM in Alberta.[4]

The Director responded to Normtek’s statement of concern advising that Normtek was outside of the environmental impact area of the proposed project and therefore, Normtek was not directly affected.[5] Secure Energy subsequently received an amendment to its approval, and Normtek appealed to the Board.

Environmental Appeal Board Decision

Under section s 91(1)(a)(i)) of the Environmental Protection and Enhancement Act[6] (the “Act”), the Board may hear an appeal by a party that is “directly affected” by the Director’s decision.[7] However, an appeal can be dismissed under section 95(5)(a)(ii) of the Act if the Board finds that the appellant does not have standing – i.e. that is not “directly affected” by the decision.

Secure Energy challenged the standing of Normtek on the basis that it was not directly affected by the Director’s decision to issue the amended landfill approval. Normtek submitted that its business was based on adhering to the international and national standards for disposal of NORM, and the negative impact of the amended approval on its business and the negative effect on the environment were inextricably intertwined.[8] By contrast, Secure Energy argued that unless a natural resource near the landfill which Normtek used was being harmed, Normtek was not directly affected and standing ought not to be granted.[9]

The Board found that Normtek’s concerns were primarily commercial or economic, and that these concerns were speculative.[10] The Board held that an impact on one’s use of a natural resource was required for standing, which must be supported by evidence.[11] Therefore, Normtek was not directly affected and did not have standing to appeal the Director’s decision. Accordingly, the Board dismissed Normtek’s appeal.

Judicial Review: Alberta Court of Queen’s Bench

Normtek sought judicial review of the Boards decision, arguing that the Board had erred in law by giving an unduly restrictive interpretation of the phrase “directly affected” in section 91(1)(a)(i) of the Act.[12] Normtek’s application was dismissed by the Court of Queen’s Bench.

The Court of Queen’s Bench upheld the Board’s finding that the for Normtek to have standing, the harm caused to it by the amended approval could not be speculative and that there must be a causal connection between the economic harm and the amended approval. Further, that even assuming a direct economic effect that was not speculative, Normtek still had to demonstrate a connection between the economic harm and an effect on the environment.[13]

The reviewing judge found that the Board had reasonably exercised its discretion to decide that Normtek was not directly affected without considering the merits of the appeal. This finding was made despite the reviewing judge noting that exploration of the merits of the appeal may support a stronger case for potential harm to the environment or human health and safety.[14]

Normtek appealed Court of Queen’s Bench decision.

Alberta Court of Appeal

The Court of Appeal disagreed with the Court of Queen’s Bench and the Board, and found that Normtek’s objection was as much regulatory concern as it was economic or commercial. Normtek had argued that the Director’s decision directly affected its interest, as an industry participant, in a regulatory regime which governed its industry in the interests of protecting the environment. The Court of Appeal held that it would be:

… hard to think of a better basis for standing before the Environmental Appeals Board than a concern about a regulatory decision which is alleged to adversely impact a party economically and which also may have implications for environmental protection, particularly when the regulatory decision permits an activity which involves the disposal of a substance of concern under the Act (i.e. radiation).[15]

The Court of Appeal reviewed a number of sections sunder the Act[16] and held that a narrow interpretation of “directly affected” to impacts on the appellant’s use of natural resources affected by the activity approved by the Director is not supported by a plain reading of s 91(1)(a)(i) of the Act.  Rather, the test is whether the appellant is “directly affected by the Director’s decision”, however that direct effect manifests itself.”[17] 

The term “adverse effect” is defined in section 1(b) of the Act as the impairment of or damage to the environment, human health, safety or property.[18] If one is adversely effected by a decision of the Director, an appellant may be directly affected and therefore have standing, regardless of their use of a natural resource impacted by the decision.[19] The Court of Appeal found that the Act does not require an impact on natural resources in order to ground standing. While such an impact could establish directly affected status, it is not a prerequisite to establishing standing where other adverse effects are alleged.[20]

The use of the term “adverse effect” in other sections of the Act, such as when a Director may amend an approval under section 70(3)(a)(i)[21], or when an environmental impact assessment for a project is necessary under section 40[22], also indicate that the restrictive interpretation by the Board was unreasonable, as the Director is obliged by the Act to consider the environmental, social, economic and cultural consequences, if any, resulting from the proposed activity, as well as issues related to human health.[23]

The Board has, in past decisions, declined to apply a formulaic test to determine standing. Instead, the Board should consider standing on a case by case basis, taking into account the varying circumstances and facts of each appeal.[24] The Court of Appeal found that the decision of the Board was unreasonable to not consider all evidence of Normatek as evidence related to its substantive claims also went to the issue of Normatek’s standing. Essentially, it is unreasonable to necessarily view standing and merit in silos as two distinct and separate issues.[25]

The directly affected issue and the substantive issues are often effectively the same.[26] The Court of Appeal further held that the issue of whether an appellant is directly affected by a proposed activity necessarily requires a consideration of the nature and merits of the appellant’s objection, especially if the basis of the appellant’s objection is the “adverse effect” of the Director’s decision on it.[27]

The Court of Appeal has remitted the matter back to the Environmental Appeals Board for further consideration of Normtek’s standing.

Conclusion

This is an important decision by the Court of Appeal as it has the potential to expand the category of parties that have standing to bring an appeal before the Board, which could result in more appeals being brought and heard by the Board. The finding that an appellant’s standing can be grounded in an impact to its economic interests, which does not need to be tied to its use of the natural resources or environment, is a departure from the test the Board has been applying for several years.

The Court of Appeal’s decision also has the potential to expand the scope of a hearing on the preliminary issue of standing before the Board. In some cases this could mean essentially having to go through an entire appeal hearing with evidence and submissions on the merits in order for the Board to decide the preliminary issue of standing. The Court of Appeal found that a preliminary issue is one that must be decided first; it does not mean that the Board is required to have a limited hearing only on that issue and not consider the merits.[28] This represents a significant shift in the Board’s practice in recent years where issues of standing were decided first as a separate matter, and a full hearing on the merits would not occur if standing was not made out. This shift is relevant to parties appearing before the Board as it could significantly increase the cost and time associated with an appeal hearing.

Essentially, the Court of Appeal may have opened the door to more and longer appeals before the Board.

Decision making on environmental issues requires a balancing of several policy and other considerations. These various and sometimes competing interests are set out in section 2 of the Act and include sustainable development, environmental protection, economic prosperity and public participation, among other things. The Court of Appeal’s decision in Normtek v EAB interprets the legislation and seeks to balance these considerations in accordance with the purpose and intent of the Act.

For more information on how this recent decision may affect you or your business, please contact Sean Parker in Edmonton, JoAnn P. Jamieson in Calgary or another member of our Energy, Environmental and Regulatory Practice Group.

---

[1] Normtek Radiation Services Ltd v Alberta (Environmental Appeals Board), 2018 ABQB 911.

[2] Normtek Radiation Services Ltd. v. Director, Red Deer-North Saskatchewan Region, Alberta Environment and Parks, re: Secure Energy Services Inc. (2 March 2018), Appeal No. 16-024-D (A.E.A.B.).

[3] Normtek v EAB at para 9.

[4]  Ibid, at Para 14.

[5] Ibid, at Para 19.

[6] RSA 2000, c E-12.

[7] Additional criteria may apply for an appeal to be heard by the Board that are not that are not relevant to the current discussion.

[8] Supra note 3, at Para 36.

[9] Ibid, at Para 41.

[10] Ibid, at Para 59.

[11] Ibid, at Para 60.

[12] Ibid, at Para 62.

[13] Ibid, at Para 64.

[14] Ibid, at Para 66.

[15] Supra note 3, at Para 118.

[16] For example ss. 1(b), 70(3) and 40.

[17] Supra note 3, at Para 82.

[18] Ibid, at Para 83.

[19] Ibid.

[20] Ibid, at Para 96..

[21] Section 70(3)(a)(i).

[22] Section 40.

[23] Supra note 3, at Para 85.

[24] Supra note 3, at Para 88.

[25] Ibid, at Paras 131-132.

[26] Ibid, at Para 136.

[27] Ibid, at Para 135.

[28]  Ibid, at Para 134.

AER to Consider Honour of the Crown in Redetermination Hearing

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.