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Vol. 19, No. 30 Week of July 27, 2014
Providing coverage of Alaska and northern Canada's oil and gas industry

Caught in a legal mesh

Canadian court aboriginal land title verdicts spur first wave of court action

Gary Park

For Petroleum News

While governments, resource-sector leaders and lawyers grapple with the meaning of historic court judgments on aboriginal land rights in Canada, First Nations are wasting no time launching a flurry of legal and regulatory actions that threaten to stall progress on a number of projects.

In the wake of two rulings over the past month by the Supreme Court of Canada, one of which awarded title to a chunk of land in central British Columbia to the 3,000-member Tsilhqot’in First Nation, initial government and industry reaction portrayed the decision as a simple clarification of previous lower-court decisions.

But Gwyn Morgan, former chief executive officer of Encana, said the 37-page decision has “exceeded the worst-case scenario of both governments and industry.”

Writing in the Globe and Mail he said the court has “established a separate legal structure for aboriginals and non-aboriginals that has implications far beyond land entitlements.”

In Morgan’s view the interpretation of “existing treaty and aboriginal rights” in the Canadian Constitution of 1982 is “a recipe for investment-killing litigation. A windfall for lawyers, but economic poison for the country.”

Aboriginal title issue

The Supreme Court decision said that if a government “begins a project without consent prior to aboriginal title, it may be required to cancel the project upon establishment of the title. ...”

Morgan said that arriving at consent “might have to be settled by the courts, possibly undermining projects that could help First Nations lift themselves out of poverty.”

Bill Gallagher, a lawyer and former Canadian government treaty negotiator, wrote in a commentary that in the past seven months alone the British Columbia government has lost eight of 10 legal decisions affecting the resource sector.

He suggested nothing could be more harmful for the British Columbia economy than this losing streak “racked up in the normal course of resource sector business?”

Wider range of cases

Now, with First Nations emboldened by the Tsilhqot’in case, British Columbia seems to be getting pulled into an even wider and potentially destructive round of court cases, joined by Alberta.

Wasting no time to seize their opportunity to enforce claims to traditional lands, First Nations have:

*Served notice to CN Rail, logging companies and sport fishermen to pull out of almost 13,000 square miles along the Skeena River by Aug. 4 in a dispute with the federal and provincial governments over treaty talks.

• Claimed title to all lands associated with an abandoned hospital in Metro Vancouver.

• Laid claim to water on the proposed Pacific route where tankers could carry crude from the Northern Gateway pipeline.

• Launched a court challenge of the federal government’s decision to approve Northern Gateway.

The actions have also extended to Alberta, where a First Nation abruptly pulled out of regulatory hearings into TransCanada’s application to build a C$3.2 billion, 900,000 barrels per day pipeline from the northern Alberta oil sands region to Edmonton.

Fraser Institute cites uncertainty

Amid this anticipated wave of legal intervention, the right-wing Fraser Institute said a cloud of uncertainty is building in British Columbia as a result of the Tsilhqot’in ruling.

“In provinces such as British Columbia, where over 100 percent of the land is under claim by First Nations (many of them engaged in overlapping claims), there is a possibility that already existing economic development projects may be suspended or shut down,” the think-tank said.

“A potential penalty for this infringement may be additional compensation to the First Nation group for continuation of the economic development project.

“Regardless, the result is increased uncertainty and a potential increase in cost for economic development in British Columbia,” the institute said.

It said the extension of aboriginal territorial rights will force British Columbia to take a more active role in advancing oil and natural gas development.

If the two sides are unable to come to terms, governments will be forced to “justifiably infringe” on aboriginal title to defend projects that are deemed to be “of national importance,” the Fraser Institute said.

The court, while setting a “higher standard of engagement,” may end up causing more litigation than negotiation, it said.

The British Columbia government has confined itself to saying it takes the Supreme Court’s direction on consultation very seriously.

‘Strong message of Canada’

Clarence Innis, acting chief for the Gitxaala First Nation, said the Tsilhqot’in case has “given as a bit of confidence that things are going our way. That is a very strong message to Canada ... not to ignore First Nations any more, but to consult.”

Gwaans Bev Clifton Percival, chief negotiator for the Gitxsan First Nations, said the Supreme Court has delivered a verdict “that advances our right and title (forcing) the government to abide by the laws” and start negotiations that British Columbia has stalled on since 1997.

“British Columbia has been silent yet they want to have (resource) activity on Gitxsan land. So we need to get their attention,” she said.

The Gitxaala Nation and seven other groups, including the Council of the Haida Nation, is seeking leave from the Federal Court of Appeal to overturn earlier federal cabinet decisions, including its endorsement of Northern Gateway, through a judicial review.

Innis told reporters that his nation has “followed all the rules,” but was ignored when it provided evidence and expressed concerns during the Northern Gateway review. “Canada has a duty to consult and it hasn’t,” he said.

Enbridge looks to resolution

Enbridge Chief Executive Officer Al Monaco argued that recognition of the Tsilhqot’in title claim won’t affect Northern Gateway, despite being hailed by the aboriginal community as a potent new legal basis for derailing the project.

He said there are no aboriginal title claims along the pipeline corridor and, if some are filed, they will be dealt with at the time, adding that “consent in this context is driven by the fact that title would need to be proven.”

Enbridge has said it is confident that a handful of anticipated lawsuits will be resolved before it is ready to start construction.

In the Grand Rapids case, TransCanada lawyer Lars Althous urged the Alberta Energy Regulator to endorse the pipeline, noting that only a handful of people along the 300 mile route have registered objections.

He said agreements have been reached with the vast majority of stakeholders and consultations have taken place with 40 First Nations.

Establishing a route is a “a balancing act” that was achieved with “very reasonable consideration,” he said.

Athabasca Chipewyan First Nation, which is leading the fight, said the regulatory process is “fundamentally flawed,” insisting the Supreme Court has established that the “rights of aboriginal people must be taken seriously” and First Nations no longer have to “simply do whatever government and industry want.”

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