In Blueberry River First Nations v. British Columbia (Natural Gas Development), 2017 BCSC 540, released on March 31, 2017, the BC Supreme Court concluded that a decision by the Minister of Natural Gas Development to enter into a long-term royalty agreement did not trigger the Crown’s duty to consult.

In seeking to set aside the Minister’s decision, the Blueberry River First Nations (“BRFN”) argued that the agreement would encourage and incentivize oil and gas development in areas of northeast British Columbia that overlapped with its traditional territory, and thus it was owed a duty to consult. The court disagreed, finding that no direct interference with BRFN’s exercise of treaty rights would result from the royalty agreement, and the nature of any future impacts on BRFN was speculative.

Background

Rights to explore for, or produce, petroleum and natural gas resources in British Columbia are granted through tenures issued under the Petroleum and Natural Gas Act. Under that legislation, the Minister may enter into an agreement that establishes the royalty to be paid to the government for "petroleum or natural gas produced from a specified location or class of locations."

In May 2015, the Minister entered into an agreement with the North Montney Joint Venture that established long-term royalty rates for petroleum and natural gas. The agreement applies to a geographic area in northeast British Columbia that overlaps with BRFN's asserted traditional territory. However, the Crown did not consult with BRFN before entering the agreement.

Arguments advanced by BRFN

BRFN argued that it was owed a duty to consult because:

  • the royalty agreement would encourage and incentivize extensive oil and gas development in its traditional territory, and
  • expanded oil and gas activity would contribute to the cumulative impacts of industrial development and impair the ability of BRFN members to exercise their rights under Treaty No. 8.

Notably, in March 2015, BRFN had commenced a civil claim against the provincial Crown for treaty infringement in which it raised similar concerns relating to the cumulative impact of industrial development on the exercise of its treaty rights.

BC Supreme Court’s Conclusion

The Court emphasized that a “causal connection” between the Crown’s action or decision and a potential adverse impact on an Aboriginal right must exist to trigger the duty to consult, and that “mere speculative impacts” will not suffice. Ultimately, the Court found that the duty to consult did not arise on these facts, noting that the royalty agreement would have no immediate impact on BRFN’s ability to exercise their treaty rights, and the nature of any future impacts that might result from the royalty agreement was speculative. For example, the Court observed that it was unclear where the wells or other facilities would be located within BRFN’s traditional territory, concluding that:

[70] … Without a clear understanding of the actual, appreciable impacts on a First Nation’s rights, it is not possible for the Crown to engage in meaningful consultation or to develop appropriate accommodations.

In addition, the Court found that the existence of adequate and effective recourse in another forum – the civil action – acted as a discretionary bar to BRFN’s judicial review application. The Court noted that BRFN’s concerns regarding the cumulative impact of development on its treaty rights were “largely duplicative” of the concerns it had raised in the existing civil action, and that the civil action was the more suitable forum in which to address those concerns.

Implications

This case makes it clear that whether a duty to consult is triggered is often a fact-driven analysis, and the Crown’s decision that no duty arose here was found to be a reasonable one. In this case, the royalty agreement was not found to give rise to anything more than speculative impacts.