Canada: Court Quashes Alberta Minister Of Energy's Refusal To Transfer Subsurface Mineral Rights To First Nation

Last Updated: May 12 2017
Article by Maxime Faille and Paul Seaman

Most Read Contributor in Canada, October 2018

Failure to consider goal of reconciliation with First Nations was 'unreasonable'

Kainaiwa/Blood Tribe v Alberta (Energy), 2017 ABQB 107

On February 14, 2017, Mr. Justice Jeffrey of the Alberta Court of Queen's Bench (the "Court") quashed the Alberta minister of energy's decision to refuse a request by the Blood Indian Band (the "Blood Tribe" or "the Tribe") that Alberta consent to a transfer of subsurface land rights for the use and benefit of the Blood Tribe in relation to lands acquired by the Tribe pursuant to a Specific Claim settlement with Canada.

The decision is significant in that it stands for the principle that, prior to making a discretionary determination relating to a First Nation, the Crown must consider the impact of the Crown's decision on reconciliation between the Crown and First Nations.  The principle of reconciliation, the court concluded, is a constitutionally-required consideration that must inform the exercise of governmental discretion, and acts as a legal limitation on that discretion.  

Background and Procedural History

Pursuant to Treaty 7 of 1877, and in common with other numbered treaties across the Prairies, Canada was required to establish First Nation reserves of a certain size, based on the population of the First Nation adherents to the treaty (the so-called "land quantum" provision common to such treaties).  

In the course of surveying the Blood Tribe's reserve set aside pursuant to that treaty, the federal government became aware of a non-Indian who was living at the eastern end of the reserve.  Rather than insist that he vacate the lands, Canada purported to obtain a "surrender" of 444 acres of reserve land in 1889.  However, there was no evidence that the Tribe had consented to the surrender or that it was otherwise lawfully obtained, or that any compensation whatsoever had been paid to the Tribe for the land removed from them. 

The Blood Tribe submitted a claim relating to the unlawful surrender in the 1990s, and subsequently entered into two settlement agreements with Canada, by which Canada paid compensation to the Tribe intended for the purchase replacement lands, with the intent that those lands be converted into reserve land and thereby restore to the Blood Tribe the amount of reserve land that had been previously removed from them, unlawfully.

To that end, the Blood Tribe purchased the surface rights to 6 parcels of land (totalling 664.8 acres) with the settlement monies it had obtained from Canada.

In the years following Treaty 7 and the unlawful surrender, the Province of Alberta was of course established in 1905 and, in 1930, Canada purported to transfer to Alberta the administration of public lands, including associated subsurface rights (mines and minerals), through the Natural Resources Transfer Agreement ("NRTA"), subject to certain conditions.  The validity of the NRTA is disputed by the Blood Tribe, in common with other Treaty 7 and Prairie First Nations, including on the basis that they did not consent to such transfer and were not consulted, and that such a transfer was in breach of Treaty obligations of the federal Crown.  However, that issue was not engaged in this dispute. 

Rather, the Blood Tribe argued that Alberta, in assuming certain rights and obligations pursuant to Treaty 7, was obligated to help give effect to full restitution to the Blood Tribe, by agreeing to transfer, for the use and benefit of the Blood Tribe, the subsurface rights that it purported to hold in relation to the replacement lands acquired by the Tribe.

Although the Minister of Energy has statutory discretion to dispose of such subsurface rights under the Alberta Mines and Minerals Act, RSA 2000, c M-17, the minister of the day refused to transfer them to the Band.

The Tribe applied to the Court of Queen's Bench requesting either an order of mandamus compelling the Minister to transfer the subsurface rights on the basis of Alberta's requirement to fulfil its rights under Treaty 7, or alternatively that the Minister's decision not to transfer the subsurface rights be quashed as unreasonable, in failing to uphold Treaty 7, the Honour of the Crown, or consider the principle of reconciliation.

Decision

The Court denied the Tribe's request for an order of mandamus compelling Alberta to transfer the subsurface rights to the replacement lands for the use and benefit of the Tribe, on the basis that the Crown did not have a legal obligation to do so, based on the Court's interpretation of Alberta's obligations under Treaty 7 and the NRTA.1 

However, Alberta's refusal to transfer the subsurface rights was set aside on the ground that the Minister's brief reasons accompanying the refusal lacked "intelligibility and rationality" and was therefore unreasonable.  

In this regard, the Court considered the direction of the Supreme Court of Canada in Newfoundland and Labrador Nurses' Union v Newfoundland and Labrador (Treasury Board), 2011 SCC 62 and Agraira v Canada, 2013 SCC 36 in which it had instructed reviewing courts to "look to the underlying administrative record" to determine whether a particular administrative outcome was reasonable. In finding the Minister's decision to be unreasonable, the Court noted that the complete lack of reasons provided regarding the refusal to transfer the right precluded it from doing so, and thereby rendered the decision unintelligible. 

The Court commented that "[e]ven though the honour of the Crown does not require that the Minister grant the Band's request, it does extend to the nature and manner of the Minister's communications with the Band."  The Court noted that in this context, communicating reasons was to be regarded as "a sign of respect" and would display "the requisite comity and courtesy becoming the Crown as Sovereign toward a prior occupying nation. Providing reasons is also important for a decision holding such significance to the Band as does this one."   

Further, the Court ruled that there was no indication that any consideration was given by the Minister "whether, and if so how, his decision may advance or impair the process of reconciliation."  The Court commented:

[The Minister's] brief decision does not indicate he did. The reasons attributed to him do not indicate he did. Nothing in the entire record reveals the Minister considered the importance his decision might play in promoting the process of reconciliation with the Band. His considering that possibility might not have changed the outcome, but it was a mandatory consideration given the circumstances presented.

The Court ruled that the Minister was required to consider and address the impact on reconciliation with the Blood Tribe in deciding whether to exercise his discretion to transfer the subsurface rights, further commenting as follows:

[I]t does not appear that the Minister's deliberations at any time considered the role the decision could play for the band in the ongoing process of reconciliation between Aboriginal peoples and the Crown...  Opportunities to advance and promote this 'process of reconciliation' warrant attention and consideration with that in mind.  It is constitutionally mandated by Section 35 of the Constitution Act, 1982: Taku River Tlingit First Nation v. B.C. [A]t paragraph 42 of that decision the Court states:

The purpose of s. 35(1) of the Constitution Act, 1982 is to facilitate the ultimate reconciliation of prior Aboriginal occupation with de facto Crown sovereignty.

Therefore, even though the Act contains no mandatory considerations by the Minister for such considerations, or limitations on the breadth of his discretion, the broader law does.... In these circumstances the Constitution requires the Minister to consider whether, and if so how, his discretion may advance or impair the process of reconciliation with the Band.

Accordingly, the Minister's decision was set aside and the matter was returned to the Minister for re-consideration and re-determination.

Footnotes

1 These rulings are now under appeal by the Tribe.

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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