Court of Appeal to Rule on Energy Regulator’s Jurisdiction over Aboriginal Rights

In a decision issued October 18, 2013,[1] the Alberta Court of Appeal granted leave to the Fort McKay First Nation to appeal a decision of the Alberta Energy Regulator (AER)[2] that approved Brion Energy Corporation’s application for a bitumen recovery project in north-eastern Alberta. Leave to appeal was granted on the issue of the AER’s interpretation of its power to decide constitutional issues, including whether the AER is required to address any limits to the province of Alberta’s constitutional power over the diminution of Treaty rights when issuing its decisions. 

The AER Decision

The Fort McKay First Nation and another Aboriginal group had opposed the application at the Energy Resources Conservation Board (the ERCB – the predecessor to the AER) expressing concerns about the effects of the proposed project on the Moose Lake reserves and about the cumulative impact of oil sands development on traditional land use.  In advance of that proceeding, the two Aboriginal groups gave notice that they would be raising certain constitutional questions relating to infringement of treaty rights and the Crown's duty to consult and accommodate.  In April 2013, the ERCB dismissed Fort McKay’s constitutional questions on jurisdictional as well as procedural grounds. The ERCB concluded that it only had the authority to consider those constitutional questions that were defined in the Alberta Administrative Procedures and Jurisdiction Act, R.S.A. 2000 c. A-3 (APJA) and that the constitutional questions raised by Fort McKay did not fall within those questions. The AER later incorporated that earlier dismissal of the constitutional questions into its final decision on the proposed project.

The Application for Leave to Appeal

The Fort McKay First Nation raised four issues in its leave application:

1. Whether the AER erred in law or jurisdiction by finding that the question, whether approval of the project would constitute a meaningful diminution of the Treaty rights of the Fort McKay First Nation and therefore be beyond provincial competence, was not a question of constitutional law as defined in the APJA;
2. Whether the AER erred in law or jurisdiction by finding that it had no jurisdiction to consider constitutional issues other than those defined as "questions of constitutional law" in the APJA; 
3. Whether the AER erred in law or jurisdiction by reason of its own narrow interpretation of its inquiry  jurisdiction and its remedial jurisdiction to consider and respond, respectively, to cumulative environmental effects; and
4. Whether the AER erred in law or jurisdiction by reason of the process through which it purported to make findings respecting project impacts on constitutionally protected Treaty rights of the Fort McKay First Nation.
   

Mr. Justice Slatter granted leave to appeal on the first and second issues but denied leave on the third and fourth issues.

On the issues relating to the AER’s jurisdiction to consider constitutional questions, Justice Slatter dismissed Brion’s argument that Fort McKay’s leave application appeal had been brought out of time since the interlocutory decision dismissing the constitutional questions was made in April 2013 and wasn’t appealed within the statutory time limit. Justice Slatter concluded that the better approach, as a general rule, is to regard the final decision as incorporating by reference all of the interlocutory decisions that preceded it, and then to apply for leave to appeal on any issues that remain at the end of the proceedings.

Justice Slatter also dismissed Brion and the AER’s argument that the AER never decided the constitutional issue upon which the leave to appeal was requested; namely, that the “meaningful diminution of treaty rights” was not mentioned in Fort McKay’s original constitutional questions to the AER.  These questions referred instead to “infringement of the rights guaranteed by Treaty 8” leading to “no provincial jurisdiction”.  Justice Slatter concluded that the constitutional question originally posed by Fort McKay would have required the AER to inquire into Fort McKay’s Treaty rights, and then the legislative competence of the province.  The AER had in fact addressed these questions, and declined to inquire into them.  Given this, Justice Slatter found that there is a live issue respecting the AER’s interpretation of its power to decide constitutional issues under the APJA and that this issue is of general importance, justifying the appeal.

In respect of the cumulative effects issue, Justice Slatter found that the AER had considered cumulative effects in its decision and that there was no discrete issue of law on which leave to appeal could be granted on the issue.  On the fourth issue, the AER’s process, Justice Slatter concluded that Fort McKay had not isolated or identified any precise procedural defects to be challenged and so leave to appeal on that issue was also denied.

Ultimately, Justice Slatter granted leave on the issues relating to constitutional questions and framed the issues as follows:

a)    Did the ERCB or the AER commit any reviewable error of law or jurisdiction in the assessment of the type of constitutional questions they could or should consider under their general jurisdiction over issues of law, or the APJA, and if so

b)    Did the reviewable error in defining the scope of the constitutional issues have any reviewable impact on the ultimate approval of the project by the AER?

Implications of the Decision

The AER’s decision takes effect at the time that it is rendered and is not automatically stayed by the granting of a leave to appeal; although the AER may suspend the operation of the decision or any part of it until the appeals process is concluded or the appeal is abandoned.  Upon hearing the appeal, the Court may confirm, vacate or give directions to vary the AER’s decision.  In this case, given the constitutional nature of the appeal, the Court’s future decision on the appeal could have broader implications for both the jurisdiction of the AER to consider other constitutional issues and, ultimately, potentially the jurisdiction of the province of Alberta to approve projects if they may result in the “meaningful diminution of Treaty rights”.