Justice Hillier of the Alberta Court of Queen’s Bench has dismissed an application for judicial review filed by the Fort McKay First Nation (“FMFN”) against Alberta Environment and Sustainable Resource Development (“ESRD”) seeking an Order quashing ESRD’s decisions about consultation adequacy and land activity dispositions in relation to oil sand exploration and seismic programs (“Projects”) initiated adjacent to reserve lands.

Justice Hillier, ruled that the ESRD had appropriately respected the legal and constitutional limits placed upon it and correctly administered the scope of its duty to consult as reflected in the overall process.

FMFN is a First Nation and a band under the Indian Act, RSC 1985, c I-5 with rights negotiated under Treaty 8 regarding four Reserves located north of Fort McMurray: a main settlement at Fort McKay, an oil sands development reserve, and two additional more remote Moose Lake Reserves. ESRD is the designated Ministry of the Crown in Alberta responsible for dispositions under the Public Lands Act, RSA 2000, c P-40 and various related statutes.

Following a series of exchanges and correspondence between FMFN and Prosper Petroleum Ltd. (“Prosper”), successor to Koch Oil Sands Operating ULC (“Koch”), and current proponent of the Projects, the ESRD issued a Letter of Authority to Prosper on February 7, 2013 authorizing entry onto and occupation of public lands for one year to carry out the Oil Sands Exploration (“OSE”) Program. As of February 8, 2013, authorization was additionally granted for the Seismic Program. The approvals were both scheduled to be active for less than three months, expiring on April 30, 2013.

The Seismic Program, contrary to expectation, was not completed prior to the expiration of initial authorization due to weather. On April 26, 2013, Koch’s agent submitted a new application for the Seismic Program to allow it to complete the seismic work. On May 16, 2013, ESRD approved the application. The new authorization was scheduled to expire on April 30, 2014.

The purpose of the OSE Program was to determine the bitumen resource potential of reservoir situated near Namur Lake, directly on one of the Moose Lake Reserves. Drilling of twenty-four core holes was planned, with each core hole requiring disposal of waste in the form of drilling fluids and cuttings. The proposed program was temporary suggesting about four or five days of activity per core hole. It was contemplated that the later proponent, Prosper, would convert some core holes into observation wells following completion.

The purpose of the Seismic Program was to determine the depth and orientation of rock formations underlying the surface of land or water to a depth of 500 m along a 347.56 km line. The project required removal of vegetation for 1.5 to 2.5 meters along the 347.56 km line access lines, as well as avoidance mulcher and hand-cutting techniques using both new and existing cuts. Upon completion, the proponent was to lay down logs and/or woody debris to restrict access to the area, recommended by ESRD.

ESRD initially characterized the OSE Program as requiring “notification with follow-up”, while the Seismic Program required “notification with no follow-up”. Nevertheless, the AESRD Lands and Forestry First Nations Consultation Operating Procedures (“SOPs”) left room for interpretation where a scenario was thought to be unique or complex. As noted by Justice Hillier, both Programs engaged in extensive follow-up.

ESRD reviewed the OSE Program consultation records, noting that the FMFN advised that "[unless] required for further testing" wells would be abandoned immediately after drilling and would be adjacent to the main road. The core hole in question was immediately adjacent to the main access route. ESRD concluded that consultation would not be required for the conversion. On April 3, 2013, Prosper applied for the surface disposition for the observation well conversion and ESRD issued a Letter of Authorization on July 10, 2013.

FMFN argues that the ESRD decisions violate the Honour of the Crown and detrimentally impact FMFN’s Treaty and Aboriginal Rights. The ESRD argues that it has fulfilled its duty to consult, having given extensive regard to the Records of Consultation, the role and obligations of the FMFN, and the impact of the decisions on FMFN’s rights. On its own, Prosper asserted that strong efforts were made to engage the FMFN in proper consultation to address and reasonably mitigate concerns as to any impact that the Projects may have on FMFN’s rights.

With respect to the standard of review, Justice Hillier determined that the appropriate standard of review was correctness with regard to whether a duty to consult was triggered and the extent of the duty to consult or accommodate. However, Justice Hillier stated:

… to the extent that the scope of the duty to consult is premised on an assessment of facts, deference to the fact findings of the initial adjudicator may be appropriate. The need for deference and its degree depends on the nature of the question the tribunal was addressing and the extent to which the facts were within the expertise of the tribunal. Absent error on legal issues, the tribunal may be in a better position to evaluate the issue than the reviewing court, and some degree of deference may be required, leading to a standard of review of reasonableness. The consultation process itself must be reasonable.

Justice Hillier, referring to Haida Nation v British Columbia (Minister of Forests), 2004 SCC 73 (CanLII), 2004 SCC 73 at paras 43-45, indicated that the duty to consult lies on a spectrum and stated:

Where the claim to title is weak, the Aboriginal right limited, or the potential for infringement minor, the Crown may only be required to give notice, disclose information, and discuss any issues raised in response to the notice. If a strong prima facie case for the claim is established, the right and potential infringement is of high significance to the Aboriginal peoples, and the risk of non-compensable damage is high, then deep consultation, aimed at finding a satisfactory interim solution, may be required. It may include the opportunity to make submissions for consideration, formal participation in the decision-making process, and provision of written reasons. Other cases will lie on the spectrum somewhere between these two extremes. Each case must be approached individually and flexibly: the level of consultation required may change as the process goes on and new information comes to light.

The controlling question is what is required to maintain the Honour of the Crown and to effect reconciliation between the Crown and the Aboriginal peoples with respect to the interests at stake. The Crown must balance societal and Aboriginal interests in making decisions that may affect Aboriginal claims. It may be required to balance and compromise when making decisions in the face of disagreement as to the adequacy of its response to Aboriginal concerns.

Justice Hillier held that in the case at hand the ESRD had determined from the outset that the scope of duty fell at the low end of the spectrum, being “notification with follow up” for the OSE Program and “notification with no follow up” for the Seismic Program. Subsequently, the ESRD had gone above-and-beyond its initial analysis and “oversaw a process whereby Koch, and subsequently Prosper, not only notified FMFN of both Programs in the proposed Project, but invited dialogue, took steps to mitigate concerns raised by FMFN where possible, and tried to resolve all outstanding concerns”. Consequently, ESRD’s treatment of the Projects was determined to have been consistent with a scope of duty falling somewhere between the two extremes described in Haida:

In my view, the ESRD did not err in its assessment of the scope of the duty to consult for the Project. The information regarding both Programs pointed to temporary activities during the winter months, confined to restricted areas, with no production component. These do not of themselves engage constitutional or Treaty limitations so as to preclude approval of such a project while recognizing the prospect of further consultation with FMFN as expressed. There has been no reviewable error.

In considering the question of the adequate discharge of the duty, Justice Hillier began by addressing appropriate delegation procedures. Substantial consideration was paid to Prosper’s noteworthy position as a well-placed responder to FMFN mitigation concerns, Record of Consultation updates, meetings schedule, and regular monitoring of Prosper-FMFN interaction. Justice Hillier, upon review determined that the ESRD had not erred in entrusting certain aspects of consultation to Prosper.

With respect to consultation substance and timing, Justice ruled that nothing in the Records of Consultation or arguments contradicted Prosper’s position that the only issue left unresolved after August 2012 had been implementation of a buffer. Consequently, ESRD was not found to have erred in interpreting Prosper’s representations of FMFN’s positions that, with the mitigations having already been agreed to by Prosper, FMFN did not have any specific concerns opposing the Projects. As stated by Justice Hillier,

The request for a broad buffer is not a totally separate silo of consultation, but it is a concern much larger than Prosper and FMFN alone could resolve. The Crown’s agreement to continue a different level of non-delegated consultation towards a more comprehensive solution to cumulative consequences is not necessarily inconsistent with approval of some limited exploration and seismic activities in the area. [Therefore] FMFN did not waive consultation but rather requested that an enduring problem be transitioned to explore a more comprehensive solution.

Following ESRD’s agreement to separately address the buffer concerns of FMFN, Justice Hillier found that the former did not forfeit or otherwise paralyze its responsibility to complete a timely assessment of the adequacy of actual consultation and mitigation of impacts arising from the proposed Prosper Projects. As a result, the process chosen by ESRD was held to have been a “fair and balanced response to the legitimate concerns raised by FMFN. … The broader level of consultation in this case does not ignore FMFN’s Treaty Rights in relation to its Reserve lands; rather, it enables them to be addressed in a more comprehensive process in which the interested parties are properly able to fully consider the issues.”

FMFN argued that the provinces operating procedures with respect to consultation (the “SOP”) fettered ESRD’s ability to fulfill its duty to consult because they did not permit ESRD staff to consider impacts on all Treaty Rights; adverse impacts beyond site-specific impacts; whether a project should proceed at all; and whether or not the SOPs should be strictly applied in the context of the specific decisions before it. Nevertheless, the Court found that nothing on the record established that the ESRD’s discretion was fettered by the SOPs due to their flexibility.

FMFN submitted a subsequent, much larger argument submitting that the process was procedurally unfair in that certain communities between ESRD and Prosper had not been made known to FMFN, ESRD had improperly considered threats issued by Prosper for faster program approval, and ESRD had failed to adequately copy FMFN on a handful of messages. Justice Hillier stated:

The failure to copy blunt messages, even if derived from best efforts to meet time constraints, cannot be condoned. The Crown should be encouraged to err on the side of disclosure at all stages of a consultation process. This is consistent with the requirement for “respect and open co-operation” as contemplated by the SOPs.

Nevertheless, Justice Hillier distinguished the case at hand, ruling that: “[s]trictly speaking, however, Prosper’s threatening communications to ESRD may be considered to be outside of the actual consultation process. Prosper took the position that consultation was complete and adequate. ESRD agreed once it was clear that FMFN did not support further meetings with Prosper.”

In addition, with regard to some of ESRD’s communications that were not shared with FMFN, Justice Hillier held:

Although some of Prosper’s latter communications to ESRD were not shared with FMFN, Prosper had alerted FMFN variously to its time constraints and that it was concurrently pursuing the approval process. The content of these single destination complaints was no secret but as an offset to threats, it is important for Alberta to encourage transparency in the consultation process. Even if Prosper’s aggressive communications to ESRD may not, strictly speaking, be part of the consultation process, best practices would see both a proponent and a First Nation copied on all contacts during the period prior to authorization. Given FMFN’s prior knowledge of concerns as to timing, I have determined in the circumstances that Prosper’s expressions of frustration and intention to push forward do not undermine the reasonableness of the ESRD decision.

Further, Justice Hillier ruled that nothing procedurally unfair had transpired through the actions of ESRD. Notably, Justice Hillier highlighted the fact that the Records of Consultation reflected that a number of substantive points that were raised and for which mitigation commitments were made had been addressed. Such a practice was both considered fair and consistent with the purpose of consultation. Justice Hillier held the Records of Consultation, “…supports that ESRD acted fairly in the exercise of its duty to consult and has committed no jurisdictional error.”

Finally, Justice Hillier ruled that the ESRD respected its legal and constitutional limits in the circumstances of the case. ESRD correctly determined its scope of duty as reflected in the overall process. The ESRD was alive to the seriousness of the claim or impact of infringement, and consequently Justice Hillier found that “in all of the circumstances, the ESRD did not err in concluding that meaningful consultation was undertaken and completed to an appropriate level for this Project as required in the circumstances”.

Therefore, FMFN’s Application for Judicial Review and all declarations requested were dismissed and the parties were given 60 days to speak to costs.


Other Author

Isabella Mentina


Aboriginal Law