Fort Nelson First Nation v. British Columbia (Assistant Regional Water Manager), Decision No. 2012-WAT- 013(a), British Columbia Environmental Appeal Board (Andison), 6 November 2012

The British Columbia Environmental Appeal Board made a preliminary ruling that the Fort Nelson First Nation had standing under the provincial Water Act to appeal a decision made by the respondent Assistant Regional Water Manager. The impugned decision involves the issuance of a water licence to Nexen Inc. for use in “fracking activities in northeastern British Columbia. The EAB held that the First Nation satisfied the test for standing in section 92 of the Water Act as being “an owner whose land is or is likely to be physically affected by the order”. The EAB concluded that the First Nation fell within this statutory definition due to its Treaty 8 rights to hunt, fish and trap in the lands affected by the water licence.  

The respondent Water Manager issued a Conditional Water Licence to the Nexen Inc. on May 11, 2012. The licence authorized Nexen to divert water from North Tsea Lake in northeastern BC for storage in dugouts and use in oilfield injection. This process of hydraulic fracturing is also known as “fracking”.  

The Tsea River watershed is covered by Treaty 8. The Fort Nelson First Nation (“FNFN”) is an adherent to Treaty 8 and exercises treaty rights in the vicinity of North Tsea Lake. The FNFN asserts that the Tsea River watershed is within the “core” of its traditional territory.  

The Ministry of Forests, Lands and Natural Resource Operations sent a referral package to the FNFN in June 2009 concerning Nexen’s application. A shortterm water use approval was made in October 2011. In January 2012, the Ministry notified the FNFN that it had conducted a preliminary review of the matter, including a Treaty 8 traditional use study, and concluded that the proposed water licence did not appear to have an appreciable adverse effect on the FNFN’s ability to exercise Treaty 8 rights. The FNFN were invited to provide further input within 30 days. The FNFN did not respond to this request. On April 3, 2012, the Ministry notified the FNFN that it was proceeding to make a decision on the application, and noted that no further information had been provided. The FNFN then requested a consultation meeting. In a subsequent letter, the FNFN alleged that there had not been any “real consultation”, and that the Ministry had reached a foregone conclusion.

The water licence was issued to Nexen on May 11, 2012. It had a term of five years. The FNFN appealed this decision on June 11, 2012, alleging that a lack of meaningful consultation, and that there had been inadequate consideration and assessment of certain impacts. The Water Manager challenged the standing of the FNFN to bring the appeal.  

Standing Under Section 92 of the Water Act

Section 92 of the Water Act concerns the right to appeal decisions of the Water Manager or comptroller. The Panel summarized:

… section 92(1) of the Water Act only allows an appeal to be filed by the person who is subject to the order (e.g., the Licensee), an owner whose land is or is likely to be physically affected by the order, or a licensee, riparian owner or applicant for a licence who considers that their rights are or will be prejudiced by the order.

The issues to be determined by the Panel in this preliminary ruling were: (1) whether the FNFN has standing under s. 92(1)(b) as an “owner whose land is or is likely to be physically affected” or (2) whether the FNFN has standing under s. 92(1)(c) as a “riparian owner … who considers that their rights are or will be prejudiced”.  

The EAB concluded that the FNFN has standing under section 92 of the Water Act.

Meaning of “Owner”

Section 1 of the Water Act defines “owner” to mean a person “entitled to possession of any land … and includes a person who has a substantial interest in the land …”. There are two important aspects of this definition for the purposes of this case: an entitlement to “possession” and the meaning of “substantial interest in the land”. The EAB agreed with the Water Manager that a “substantial interest in the land” must refer back to the land to which the person is entitled to possession.  

“Entitled to Possession”

Since there is a statutory definition of “owner”, common law concepts of possession are not determinative. These terms must be interpreted in the context of the statutory language, and the purpose of the legislation. Further, treaty rights cannot be interpreted as if they were common law property rights.  

The word “possession” has a variable meaning in the law. It can be synonymous with “occupation”, but does not necessarily involve residence. The Panel rejected the argument of the Water Manager that possession should be restricted to exclusive possession of the land, or to registered owners of land or charges on the land. The meaning of “owner” in the Water Act is distinct from the statutory definition in the Land Title Act.

The Water Manager argued the FNFN were not entitled to possession, since they had surrendered their rights to the lands in Treaty 8. The members of the FNFN were entitled to non-exclusive rights of access and use. Further, the FNFN was conflating its Treaty 8 rights with Aboriginal title. In contrast, the FNFN argued that its Treaty 8 rights included activities incidental to hunting, fishing, and trapping such as travelling to hunting grounds and constructing or occupying cabins. They also submitted that the appeal provisions in the Water Act had been expanded in the late 1990s, and denying an Aboriginal group the right to appeal under the Act would force them to the Courts.  

The Panel agreed with the submissions of the FNFN that an earlier Water Act case – Allied Tsimshian Tribes Association (1995) – can be distinguished on the basis of subsequent legislative changes to the Water Act, which expanded the scope of the appeal provisions, and changes in the law on Aboriginal rights. That case also involved asserted Aboriginal rights, not Treaty rights. The Panel agreed that Treaty 8 rights are existing rights.  

The Panel also found some similarities in the Water Act definition of “owner” with the definition in Part 4 of the Environmental Management Act. An owner is not restricted to persons registered as owners, but may include persons with a legal or equitable interest in the land. The EAB relied upon its discussion in CP Railway (2006) on the meaning of “owner”. The EAB then summarized:  

For all of the reasons provided above, the Panel finds that “possession”, as used in the Water Act’s definition of “owner”, has a broad meaning and is not limited to fee simple ownership or other proprietary interests that include a right to exclude others from the land. “Possession” may be synonymous with “occupy”, and may simply mean the physical occupation of, or taking up of space on, the land. However, the Panel finds that physical occupation, in this context, must have an element of continuity. A passing or transitory physical presence on the land is insufficient to constitute “possession”.

The Panel concluded that the FNFN’s rights under Treaty 8 satisfied this broad meaning of “possession”. Exercising the treaty rights of hunting, fishing and trapping necessarily involves a physical presence on the land. Although these activities are seasonal, they are characterized by continuity, over generations, at specific locations. Accordingly, such activities cannot be seen as a transitory physical presence. The Panel summarized:  

As such, the Panel finds that the First Nation is an “owner” within the meaning of section 92(1)(b) of the Water Act because the First Nation’s members are “entitled to possession” – in that they are entitled to physically occupy and use, on a continuing basis – the lands where they exercise their treaty rights to hunt, fish and trap, and there is evidence that the First Nation conducts those activities in and around North Tsea Lake.

“Substantial Interest in the Land”

The Panel held that the phrase “substantial interest in the land” does not require that the interest be registerable on the title of the land, such as interests under the Land Title Act. Rather, the statutory definition indicates that the interest in land “must be one of substance, in that it must be legally valid, and must be of significant importance to the interest holder”. It must also mean a substantial interest in the land to which the person is entitled to possession. The definition requires a legally recognizable interest, and one that is of significant importance to the interest holder.  

The Panel held that the Treaty 8 rights of the FNFN satisfied this statutory language. Citing the Beckmann decision, the Panel held that treaty rights form a unique type of interest in Crown land. The Panel also referred to the findings of the Ontario Superior Court of Justice in the Keewatin case that Treaty 3 rights constituted an interest “other than that of the province” pursuant to s. 109 of the Constitution Act, 1867.  

There is no dispute that Treaty 8 rights are legally recognized. Further, the Panel accepted that the FNFN’s treaty rights are of significant importance to their culture.  

“Likely to Be Physically Affected”

Section 92(1)(b) of the Water Act further requires that the land possessed by the “owner” is or is “likely to be physically affected” by the water licence. This is an objective test. As long as there is a legitimate basis for the applicant’s concerns, standing will be granted.  

After reviewing the evidence, the Panel concluded that there is a reasonable likelihood that the lands in and around North Tsea Lake will be physically affected by the water licence. The licence issued to Nexen involves significantly more water being diverted than under the short-term approval. This change may have a physical effect on the water level and, in consequence, the land. The Panel noted that this finding was for the limited purpose of this preliminary ruling on standing.

“Riparian Owner”

Due to the Panel’s finding that the FNFN satisfied s. 92(1) (b) of the Act, it was unnecessary to determine whether the definition of “riparian owner” in section 92(1)(c) was also satisfied. The Panel, however, briefly set out its reasons that the FNFN would not have met this test.  

The common law meaning of “riparian owner” applies in the context of section 92(1)(c). The FNFN does not satisfy this definition because the lands around North Tsea Lake were surrendered and ceded to the Crown under Treaty 8. The FNFN’s reserve lands are not lands through or past which the Tsea River runs, and the Lake is not adjacent to any reserve lands. There is no evidence that the FNFN holds Aboriginal title to any of these lands.  

Conclusion

The Panel therefore held that the FNFN has standing under s. 92(1)(b) of the Water Act to appeal the Water Licence issued to Nexen in May 2012. The application of the Water Manager to dismiss the appeal was denied.