Canada: Saskatchewan Court Holds That Duty To Consult Not Triggered For Crown-Issued Oil Sands Exploration Permits

Last Updated: May 12 2014
Article by Alison J. Gray and Laura M. Gill

The Saskatchewan Court of Queen's Bench held in Buffalo River Dene Nation v The Minister of Energy and Resources and Scott Land & Lease Ltd, 2014 SKQB 69, that a decision of the Minister of Energy and Resources to post for sale and subsequently issue two oil sands special exploratory permits did not trigger the duty to consult and accommodate, as the issuance of the permits did not amount to a decision that could affect the use of the lands covered by Treaty 10.

The question of whether the posting for sale and issuance of oil and gas exploration permits triggers the duty to consult had previously been undecided, although similar challenges by First Nations groups to leases granted by a province for Crown-owned mineral rights have previously been before the courts. See, for example, Athabasca Chipewyan First Nation v Alberta (Minister of Energy), 2009 ABQB 576, and Dene Tha' First Nation v British Columbia (Minister of Energy and Mines), 2013 BCSC 977.

In analyzing whether the duty to consult was triggered in this case, the Court focused on two elements of the Crown's process: (1) the specific nature of rights authorized by the permits; and (2) the initial decision by the Minister to post the permits for sale. With respect to the nature of the rights authorized by the permits, the Court emphasized that the permits did not provide authorization for the permit holder to go onto the land and conduct exploration work. Rather, the permit holder must obtain separate authorization from the Minister of Environment to conduct exploration work, which is granted independent from the Minister and without regard to the existence of the permits. As to the process leading to the Minister's decision to post the permits for sale, the Court found that the decision involved a "relatively straightforward" administrative process as opposed to a "strategic" or "high-level" decision. In the result, the Court held that neither the posting or issuing of the permits by the Minister engaged the duty to consult because there was no decision that could affect the use of the land that could potentially adversely impact the BRDN's rights. However, the Court observed that a subsequent decision of the Minister of Environment with respect to entering on to the lands may engage the duty to consult.

Without further guidance from the courts, it is difficult to say conclusively that the duty to consult is not triggered in every circumstance involving the Crown's disposition of mineral rights. While the application of the principles in this case to other permit approval processes outside of Saskatchewan requires further analysis, the decision highlights the relevance of the process and degree of long-term planning involved in a Crown decision to post for sale and issue oil and gas leases or permits to the determination of the existence of the duty to consult. The decision also reinforces the importance of determining the extent of the specific rights granted by an oil and gas lease or permit and whether those rights may be exercised by a permit holder immediately, or whether they are subject to additional governmental approvals that may subsequently trigger the duty to consult.

To date, the case has not been appealed.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Alison J. Gray
Laura M. Gill
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