On June 2, 2016, the Supreme Court of Canada denied an Alberta First Nation's request to appeal the Court of Appeal's dismissal of its bid to challenge a regulatory approval. The Alberta Court of Appeal had decided the First Nation couldn't appeal the regulatory approval because it didn't prove that it was eligible to do so under the specific wording of the relevant legislation. The decision brings the threshold question of eligibility to appeal into the forefront. This might limit the extent to which a First Nation will use regulatory appeals to challenge a regulatory decision.
Here is a look at the decision and how project proponents in the energy and natural resources sector should refine their risk analyses of Canadian projects and works.
The Case. In O'Chiese First Nation v. Alberta Energy Regulator, Shell applied to the Alberta Energy Regulator for approvals and rights for the construction of two natural gas pipelines and a natural gas well site. Shell planned to locate these works on Crown lands that, though not reserve lands, are within the area subject to the O'Chiese First Nation Consultation Area (Alberta's Department of Aboriginal Affairs established the Area to facilitate the Provincial Crown's duty to consult). The Regulator granted the approvals to Shell in a process that did incorporate a basic level of consultation approved by the Province's Aboriginal Consultation Office. The O'Chiese First Nation filed a request for a regulatory appeal of the approvals claiming, in part, that the consultation process was insufficient. The Regulator dismissed the appeal request, concluding that based on the specific wording of the relevant legislation, the O'Chiese First Nation was not entitled to a regulatory appeal because it did not show that it was "directly and adversely affected" by the approvals. The O'Chiese First Nation appealed that decision to the Alberta Court of Appeal.
The Court Decisions. The Alberta Court of Appeal dismissed the appeal. The Court focussed heavily on the legislation's wording establishing the threshold for eligibility to appeal the approval through the statutory appeal process: an "eligible person" must be a person who is "directly and adversely affected by a decision [by the Regulator]". The Court distinguished between interpreting the specific legislation and the Crown's broader duty to consult with First Nations, and concluded the O'Chiese First Nation did not present the evidence to prove it met this threshold question. The O'Chiese First Nation sought leave to appeal this decision to the Supreme Court of Canada, which denied it with an order that the O'Chiese First Nation pay costs to Shell.
The Impact. By bringing the threshold question of eligibility to appeal a regulatory decision into the forefront, the decision might ultimately have the effect of limiting the extent to which a First Nation will use regulatory appeals to challenge regulatory decisions.
- Limiting Claims based on asserted Aboriginal Rights. First Nations claims of Aboriginal and Treaty Rights have become a significant consideration for project proponents in the energy and natural resources sector. The Crown's failure to meet its duty to consult can jeopardize the validity of a project proponent's regulatory approval, and mean the delay or even cancellation of project approvals. Court decisions have expanded the Crown's duty to consult First Nations to include asserted as well as proven claims. This has established a broad scope for Canadian regulators assessing potential impacts of Aboriginal and Treaty rights when issuing or denying regulatory approvals, permits and licences. This decision may limit, but does not bar, First Nations' ability to pursue a regulatory appeal based on an asserted Aboriginal or treaty right. However, where that appeal right is based on a direct and adverse effect on a person or group (or a similar threshold for eligibility), the mere fact there will be a project on off-reserve lands subject to the duty to consult will not alone meet this threshold; the First Nation must offer evidence – not just bare assertions – of that direct and adverse effect before it can make its argument that the Crown failed to meet its duty to consult. Practically, this likely means providing evidence of the existence of the asserted Aboriginal right, though it remains to be seen how much evidence is enough.
- ENR Sector Risk Adjustment. Project proponents in the energy and natural resources sector should refine their risk analyses of Canadian projects and works. This decision reminds proponents and regulators of the continued importance of the threshold question of eligibility to appeal. Canadian energy and natural resource project risk analyses likely already incorporate a measure of the evidence supporting an asserted Aboriginal right where there is a risk of a court challenge (a judicial review or a civil action) or regulatory appeal to a project approval on that basis. The regulatory appeal analysis should now clearly include an assessment of the appeal eligibility criteria in the relevant legislation versus the evidence available or likely to be put forth by First Nations claimants. Proponents and regulators should also remember, however, that the statutory appeal process is not the only way for First Nations to advance or redress claims based on asserted or proved Aboriginal and treaty right; court processes (including judicial review and civil claims) are still available. This decision could mean First Nations choose to assert claims via those avenues rather than under a statutory regime; it could also result in new and creative legal basis on which make them. Proponents and regulators should remain prepared to deal with the assertion of claims outside the statutory regime.
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