Link to Decision Summarized

Oil and Gas – Regulatory Appeal

In this decision, the Alberta Court of Appeal (“ABCA”) approved the application from Fort McMurray Métis Local Council 1935 (“Fort McMurray Métis”) who sought permission to appeal a decision by the AER that denied Fort McMurray Métis’ request for a regulatory appeal. The AER had denied the request for regulatory appeal of the Horizon South Lease 24 project’s approvals. The request was filed by Fort McMurray Métis under s. 38 of the Responsible Energy Development Act (“REDA”).

The ABCA granted permission to appeal on the following questions:

1. Did the AER err in its interpretation of the statutory requirements for eligibility to submit a regulatory appeal under REDA?

2. Did the AER err by requiring too high a threshold burden to establish eligibility to appeal?

Factual Background

Canadian Natural Resources Limited (“CNRL”) operates the Horizon Mine and the Joslyn Mine near Fort McMurray. On January 18, 2021, the AER approved CNRL’s application to integrate the Joslyn Mine with its existing Horizon Mine operations (the “Integration Application”). The AER issued its approval decision without reasons determining that a hearing was not required.

In February 2021, Fort McMurray Métis applied to the AER for a regulatory appeal of the decision to approve the Integration Application. Fort McMurray Métis raised three grounds in the request for regulatory appeal before the AER.

1. The AER misapprehended the information provided by Fort McMurray Métis and, as a result, made conclusions that were not supported by the facts.

2. The AER misapplied the test established by the ABCA in Dene Tha’ First Nation v Alberta (Energy and Utilities Board), 2005 ABCA 68 by finding that more evidence was required for the AER to find that Fort McMurray Métis were directly and adversely affected.

3. The AER did not fulfill its public interest mandate by discarding the clear issue that Fort McMurray Métis have Aboriginal rights that may be impacted and have not been considered in the approval process.

The AER decided that McMurray Métis did not provide sufficient evidence to establish the required degree of location or connection between the proposed project and the impacts on their rights in the project’s vicinity. The AER found that the integration approved by the decision did not create an additional magnitude of risk to make McMurray Métis directly and adversely affected. The approval did not involve a new project, new activities, or disturbance of any additional lands. The AER consequently denied Fort McMurray Métis’ request for a regulatory appeal.

Test for Permission to Appeal

Fort McMurray Métis provided three grounds of appeal in its application for permission to appeal to the ABCA:

1. Did the AER err in its interpretation of the statutory requirements for eligibility to submit a regulatory appeal?

2. Did the AER err by requiring too high a threshold burden to establish eligibility to appeal?

3. Did the AER err by not considering the constitutionally protected Aboriginal rights at stake?

Analysis

To determine if any of the proposed grounds of appeal meet the test for permission to appeal, the ABCA reviewed the applicable statutory scheme and the AER’s role in considering the rights of Aboriginal peoples when making decisions pursuant to an energy resource enactment. The ABCA may only consider the proposed grounds of appeal if they raise a question of law.

Do the Grounds of Appeal Raise Questions of Law?

The AER is mandated with providing for the efficient, safe, orderly and environmentally responsible development of energy resources in Alberta. REDA also sets out the AER’s role in regulating the disposition and management of public lands, the protection of the environment, and the conservation and management of water concerning energy resource activities.

Ss. 39 and 40 of REDA allow the AER to conduct a regulatory appeal of its own decisions. The decision must be “appealable,” and the request submitted by an eligible person in accordance with the requirements of s. 38(1).

The AER determined that the Fortis McMurray Métis was not an “eligible person” because it was not directly affected by the approval decision.

In reaching its decision, the ABCA referenced the matters of Normtek Radiation Services Ltd v Alberta Environmental Appeal Board, 2020 ABCA 456 (“Normtek”) and Coulas v Ferus Natural Gas Fuels Inc, 2016 ABCA 332 (“Coulas”). In Coulas, the ABCA determined that the AER may have acted unlawfully in finding that the applicant’s level of interest was insufficient to make her “directly and adversely affected” and determined that this constitutes a question of law. In Normtek, the ABCA found that “directly affected” needs to be interpreted broadly, as it is impossible to define every way in which a person could be directly affected.

The ABCA found that these two authorities indicate that the correct interpretation of an “eligible person” under section 36(b) of REDA can be a legal question and concluded that Fort McMurray Métis’ grounds of appeal that relate to the AER’s interpretation of “eligible person” and “directly affected” do raise a question of law.

The AER’s Jurisdiction to Consider Aboriginal Rights

The ABCA considered the AER’s role in assessing constitutional rights, the duty to consult, and the honour of the Crown in Fort McKay First Nation v Prosper Petroleum Ltd, 2020 ABCA 163 (“Prosper”). In Prosper, the ABCA held that the AER is a tribunal empowered to consider questions of law and that it has implied jurisdiction to consider issues of constitutional law as they arise. The AER, however, may not consider questions of law if there is a clear demonstration that the legislature intended to exclude such jurisdiction. The ABCA noted that when the “public interest” needs to be considered, the AER must apply the Constitution and ensure its decisions comply with s. 35 of the Constitution Act, 1982. A project authorization that breaches the con
stitutionally protected rights of Indigenous peoples will not serve the public interest.

In this application, the only question before the ABCA was if the Fort McMurray Métis was an “eligible person,” which question does not raise any issues about the scope or interpretation of Fort McMurray Métis’ constitutional rights. The ABCA held that the nature of Fort McMurray Métis’ constitutional rights was not before the AER in this decision. Accordingly, the Court held that this ground of appeal does not raise a question of law.

Do the Grounds of Appeal Meet the Test for Permission to Appeal?

The ABCA was satisfied that the provided grounds of appeal meet the test for permission. Fort McMurray Métis raised a serious and important issue. The approval decision extends the operation of the former Joslyn Mine by 29 years, delaying reclamation and the eventual return of the site to the Fort McMurray Métis for at least a generation. Accordingly, the applicant was directly affected.

Conclusion

The ABCA granted leave to appeal on the questions of:

1. whether the AER erred in its interpretation of the statutory requirements for eligibility to submit a regulatory appeal under REDA; and

2. whether the AER erred by requiring too high a threshold burden to establish eligibility to appeal.