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Fort McKay First Nation Granted Leave to Appeal Decision of the Alberta Energy Regulator Approving Brion Energy Oilsands Project

28-Oct-13

By Evan W. Dixon and Marco Baldasaro

On October 18, 2013 the Alberta Court of Appeal granted the Fort McKay First Nation (“Fort McKay”) leave to appeal a decision of the Alberta Energy Regulator (“AER”) approving Brion Energy Corporation’s (“Brion”) proposed steam assisted gravity drainage (“SAGD”) oilsands project (the “Project”).

Fort McKay raised a number of issues with respect to the Project during the hearing before the AER pertaining to the cumulative effects of the Project and the potential impacts of the Project on its constitutionally protected rights. Fort McKay requested that the AER establish a twenty kilometer buffer zone around the Moose Lake Reserves to protect the reserves from the effects of oil sands development.

Prior to the hearing, Fort McKay had provided notice to the Board that it intended to raise a number of constitutional issues including: the adequacy of the Crown’s consultation with respect to the project; and whether the AER’s approval of the project would constitute an infringement of its treaty rights.

In a prehearing ruling, the AER Hearing Panel concluded that it did not have the jurisdiction to consider the constitutional questions raised by Fort McKay on the basis that it only had the authority to address constitutional issues defined in the Administrative Procedures and Jurisdiction Act. The AER proceeded to the oral hearing of Brion’s application and ultimately approved of the Project.

Fort McKay applied for leave to appeal on four issues:

  1. Whether the Tribunal erred by finding that it had no jurisdiction to consider whether approval of the project would constitute an infringement of the First Nation’s treaty rights;
  2. Whether the Tribunal erred by finding that it had no jurisdiction to consider constitutional issues other than those defined as “questions of constitutional law” in the Administrative Procedures and Jurisdiction Act;
  3. Whether the Tribunal erred by reason of its narrow interpretation of its inquiry jurisdiction and its remedial jurisdiction to consider and respond to cumulative environmental effects; and
  4. Whether the Tribunal erred by reason of the process through which it purported to make findings respecting project impacts on constitutionally protected Treaty rights of Fort McKay.

In granting leave, the Alberta Court of Appeal concluded that there were live issues with respect to Fort McKay’s first two grounds of appeal pertaining to the Regulator’s interpretation of its power to decide constitutional issues under the Administrative Procedures and Jurisdiction Act, and found that these issues were of general importance.

The court was less receptive to grounds three and four and determined that the Regulator had considered cumulative effects in approving the project and concluded that Fort McKay’s process concern had been worded too broadly to constitute a suitable issue for an appeal.

The granting of leave to appeal is of particular note as Brion Energy’s SAGD project is one of the first approvals issued by the AER under the recently enacted Responsible Energy Development Act, which significantly modified the regime under the former Energy Resources Conservation Act and clarified that the AER lacks the jurisdiction to assess the adequacy of Crown consultation associated with the rights of aboriginal peoples.

This appeal may provide clarity with respect to the AER’s authority to consider constitutional issues generally and in particular, under the Administrative Procedures and Jurisdiction Act. The case may also have broader implications pertaining to Alberta’s ability to approve projects that might result in a “meaningful diminution” of the Treaty rights of First Nations residing in areas subject to extensive industrial development, such as those associated with oil sands development. 

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