In O’Chiese First Nation v Alberta Energy Regulator, the Alberta Court of Appeal dismissed two applications by the O’C​hiese First Nation for leave to appeal regulatory licence decisions by the Alberta Energy Regulator (the “AER”) made in favour of Shell Canada Limited (“Shell”). The decision clarifies that a right to a regulatory appeal is not automatically engaged as a matter of law by virtue of development on treaty lands. The decision also clarifies that a party must adduce specific evidence to demonstrate that it is directly and adversely affected by an AER decision as a pre-condition to be accorded a regulatory appeal. 

BACKGROUND

The first AER decision at issue was with respect to licences and associated approvals made by Shell for two natural gas pipelines (the “Rocky 5 and 6 Applications”). The second AER decision at issue was with respect to an application made by Shell to the AER for a mineral surface lease and a licence of occupation pursuant to the Public Lands Act for a petroleum and natural gas site and road (the “Rocky 24 Applications”).  The Rocky 24 Applications were made through the Government of Alberta’s Enhanced Approval Process.

The Government of Alberta had previously deemed Crown consultation with the O’Chiese First Nation to be either adequate or not required for the Rocky 5 and 6 Applications and the Rocky 24 Applications. The O’Chiese First Nation filed a statement of concern with respect to Rocky 5 and 6 Applications. The AER did not receive any statements of concern regarding the Rocky 24 Applications. The AER decided not to hold a hearing and all of the applied-for licences and approvals were issued. 

On July 9, 2015, the AER dismissed the O’Chiese First Nation’s requests for regulatory appeals of both decisions concluding that the O’Chiese First Nation had not satisfied section 38 of the Responsible Energy Development Act which stipulates that only an “eligible person” may request a regulatory appeal. An “eligible person” is defined as “a person who is directly and adversely affected by a decision...”. The AER concluded that the O’Chiese First Nation failed to establish that its rights would be directly and adversely affected by the approvals. 

THE DECISION

The basis of the application for permission to appeal to the Court of Appeal was that the AER erred in law in concluding that O’Chiese First Nation is not directly and adversely affected by the issuance by the AER of the approvals. 

The O’Chiese First Nation argued that once a development takes place, its traditional treaty rights are lost over the area in development and accordingly, any development undertaken within the O’Chiese First Nation Consultation Area would automatically directly and adversely affect its treaty rights. Therefore, the O’Chiese First Nation argued that it had no obligation to adduce any specific evidence to show how the approvals affected it. 

Mr. Justice Bruce McDonald for the Court of Appeal rejected this argument, finding firstly, that the AER’s determination of direct and adverse affect was a question of mixed fact and law not capable of forming the basis of an appeal. Second, in considering, the O’Chiese First Nation’s argument that this was a question of law, the Court held that the AER’s consideration of whether, as a matter of fact, a party is directly and adversely affected, must be made in consideration of evidence properly adduced before it. 

The Court supported this conclusion by analyzing the words of the Responsible Energy Development Act and the Public Lands Administration Regulation noting that the “very specific wording” of the legislation is not informed by and cannot be conflated with the Crown’s duty to consult. The Court noted that the duty to consult was discharged by the Government of Alberta’s previous decisions and that the duty does not inform the requirements of the legislation that a party must be “directly and adversely affected” as a pre-condition to be accorded a regulatory appeal. 

The Court concluded that the legislation does not provide for a right to a regulatory appeal any time an approval is granted to a development located within the party’s area of consultation and had the legislature intended such a result “it would have been easy enough for the Legislature to so provide”. 

The Court found that there was no serious arguable point raised by the applicant and accordingly dismissed the two applications for permission to appeal. 

INDUSTRY IMPLICATIONS 

The decision clarifies that First Nations, even with treaty rights over lands subject to an approval, must adduce specific evidence to meet the directly and adversely affected test. In Dene Tha’, the Court of Appeal of Alberta provided guidance on what an aboriginal group must demonstrate in order to meet the factual part of the directly and adversely affected test, stating that “[s]ome degree of location or connection between the work proposed and the rights asserted is reasonable. What degree is a question of fact for the Board...”. 

While this decision does not clarify the nature of the evidence that would satisfy this test, this case makes it clear that location or proximity between the work proposed and the rights asserted is not enough. In this case, despite the O-Chiese First Nation reserve being located some 16-20 kilometers from the land covered by the Approvals, the Court noted that “the O’Chiese First Nation adduced no evidence whatsoe​ver as to how its treaty rights would be impacted by the Approvals”. 

Also of note, the Court found that the AER’s determination on direct and adverse affect was a question of mixed fact and law that it is not capable of forming the basis of an appeal pursuant to the Responsible Energy Development Act. Accordingly, it will be difficult for a First Nation to challenge an AER determination on direct and adverse effect in the future to the Court of Appeal.