Sturgeon Lake Cree Nation is seeking judicial review (on the basis of lack of consultation) of a water licence required for early development of an AI data centre in northwest Alberta proposed by O’Leary Digital Limited. O’Leary Digital Limited applied to strike Sturgeon Lake Cree Nation’s claim, but the Alberta Court of King’s Bench dismissed O’Leary Digital Limited’s application to strike. As a result of the decision[1], Sturgeon Lake Cree Nation’s judicial review application may proceed, and O’Leary Digital Limited is not entitled to participate in the proceedings.
Background
O’Leary Digital Limited is an Alberta corporation that intends to construct a $70 billion artificial intelligence data centre and industrial park in the Greenview Industrial Gateway. The Greenview Industrial Gateway encompasses 7,000 acres of provincial land in northwest Alberta. In 2024, land within the Greenview Industrial Gateway was transferred from Alberta to the Municipal District of Greenview No. 16 (“Greenview”).
On April 7, 2025, Greenview was granted a Water Act licence to divert 6,000,000 m3 of water per year from the Smoky River. It is intended to support early development of the AI data centre project. Before the water licence was issued, Alberta’s Aboriginal Consultation Office determined that the reduced water diversion amount did not engage the duty to consult and accommodate.
Sturgeon Lake Cree Nation has Treaty 8 reserve lands near the Smoky River where they exercise their traditional Treaty and Aboriginal rights. On October 7, 2025, Sturgeon Lake Cree Nation filed a judicial review application challenging issuance of the water licence on the basis that they were not adequately consulted. Sturgeon Lake Cree Nation named the Government of Alberta and Greenview as respondents in their application.
O’Leary Digital Limited’s Application to Strike
On December 16, 2025, O’Leary Digital Limited filed an application to strike Sturgeon Lake Cree Nation’s judicial review application on the basis that O’Leary Digital Limited is a “directly affected” party and was not served within the required timeframe under Rule 3.15 of the Alberta Rules of Court.
The foundation of O’Leary Digital Limited’s application was a March 2025 Purchase and Sale Agreement between O’Leary Digital Limited and Greenview. O’Leary Digital Limited claimed to be directly affected by the judicial review because the Purchase and Sale Agreement contractually entitles O’Leary Digital Limited to acquire the water licence and certain lands within the Greenview Industrial Gateway. According to O’Leary Digital Limited, it is the ultimate beneficial holder of the water licence issued to Greenview.
The Court dismissed O’Leary Digital Limited’s application to strike. It held that O’Leary Digital Limited’s connection to the water licence was both contingent and speculative, which cannot support a finding that they are “directly affected” by Sturgeon Lake Cree Nation’s judicial review application for the purposes of Rule 3.15. The Court also refused O’Leary Digital Limited’s alternative requests for intervenor status or to be added as a respondent.
A key issue in the decision was O’Leary Digital Limited’s lack of disclosure and reliance on a heavily redacted version of the Purchase and Sale Agreement. O’Leary Digital Limited claimed certain ownership interests by virtue of the agreement, but because of the redactions it was unclear whether those interests had vested. The Court noted that O’Leary Digital Limited unilaterally redacted the agreement and then urged the Court to rely on approximately ten isolated provisions in order to decide in their favour, without being able to assess the whole of the contract. The Court concluded that the evidentiary gap created by O’Leary Digital Limited’s own redactions precluded a finding that O’Leary Digital Limited is “directly affected” within the meaning of Rule 3.15(3)(c).
What Learnings Does This Decision Offer?
This decision highlights what may occur if the adequacy of consultation is challenged. It also highlights the importance of early engagement and relationship building between project proponents and Indigenous nations. Proactive engagement and disclosure by project proponents can help build trust in the early stages of a project and reduce the risk of legal challenges to regulatory approvals.
Further, this case highlights the potential risk to project proponents when they rely on third parties to secure key regulatory approvals. Project proponents participating directly in the regulatory process will be better placed to identify potential consultation risks and work with the government and Indigenous nations to resolve them early.
How Fasken Can Assist
Fasken has focused expertise in data centre regulatory matters, including navigating provincial and municipal regulatory entitlements, as well as in Indigenous consultations and relations. As this case demonstrates, uncertainty in the outcome of Indigenous consultations can have far reaching implications for the regulatory pathways of projects, including data centres. Please do not hesitate to seek our assistance in such matters.
