Appeal allowed. When administrative tribunals deal with “public interest” in respect to natural resource development, they should be looking at more than the duty to consult, as the honour of the Crown is a far broader doctrine. In this matter, the tribunal should have addressed an unfulfilled promise of a protected area that was being negotiated.
This appeal arises out of negotiations that began in 2003 between the Government of Alberta and the Fort McKay First Nation [“FMFN”] to develop a Moose Lake Access Management Plan [“MLAMP”] to address the cumulative effects of oil sands development on the First Nation’s Treaty 8 rights. The MLAMP has not yet been finalized. The FMFN is an “[A]boriginal people of Canada” under s 35 of the Constitution Act, 1982 and a “band” within the meaning of the Indian Act, that has treaty rights to hunt, fish and trap within the Moose Lake Area, part of its traditional territory. The Moose Lake Area is of cultural importance to the FMFN.
The Alberta Energy Regulator [“AER”] approved an application by Prosper Petroleum Ltd [“Prosper”] in 2018 for the Rigel bitumen recovery project [“Project”], which would be located within 5 kilometers of the FMFN’s Moose Lake Reserves. The AER approval is subject to authorization by the Lieutenant Governor in Council [“Cabinet”], which has yet to be granted.
The FMFN was granted permission to appeal on the question of whether the AER erred by failing to consider the honour of the Crown and refusing to delay approval of the Project until the FMFN’s negotiations with Alberta on the MLAMP are completed. FMFN is concerned that the ability of its members to pursue their traditional way of life in the Moose Lake Area has been severely and adversely affected by the cumulative effect of oil sands development in the surrounding area. FMFN specifically sought a 10 km buffer zone from oil sands development around the Moose Lake Reserves. Alberta denied this request and in 2013 FMFN applied for a review. In 2014, Alberta’s then Premier, the late Jim Prentice, met with Chief Jim Boucher of FMFN to discuss the MLAMP. In 2015, Premier Prentice and Chief Boucher signed a Letter of Intent to confirm “our mutual commitment and interest in an expedited completion of the [MLAMP]”. Despite the 2015 Letter of Intent, the MLAMP has still not been finalized and is the subject of ongoing negotiations between Alberta and the FMFN.
The Project would be located within the 10-kilometer buffer zone surrounding the Moose Lake Reserves; that is, within the area covered by the MLAMP. After previously suspending the Project, in 2016 the AER resumed the approval process for the Project because “MLAMP is still not finalized, there is no indication that finalization of the MLAMP is imminent and there is no certainty when submission of the plan will occur”. The AER issued its decision in 2018 that found the Project to be in the public interest and approved the Project on conditions, subject to authorization by Cabinet. The panel declined to consider the MLAMP negotiations that contemplated the 10-kilometer buffer zone, the 2015 Letter of Intent, and whether it implicates the honour of the Crown. The AER concluded the status of the MLAMP negotiations was not a valid reason to deny Prosper’s application.
To review this decision, the Court used the standard of correctness. The AER is a public agency which exercises adjudicative functions pursuant to the Alberta Public Agencies Governance Act. As the regulator of energy development in Alberta, the AER is mandated to provide for the efficient, safe, orderly and environmentally responsible development of energy resources in the province. It has final decision-making power over many energy project applications, pending where Cabinet authorization is required.
The AER has broad powers of inquiry to consider the “public interest” in making its decisions. Tribunals have the explicit powers conferred upon them by their constituent statutes. However, where empowered to consider questions of law, tribunals also have the implied jurisdiction to consider issues of constitutional law as they arise, absent a clear demonstration the legislature intended to exclude such jurisdiction (Rio Tinto Alcan Inc v Carrier Sekani Tribal Council,  4 CNLR 250 [“Rio Tinto”]. This is all the more so where the tribunal is required to consider the “public interest”. In such circumstances, the regulatory agency has a duty to apply the Constitution and ensure its decision complies with s 35 of the Constitution Act, 1982 (Clyde River (Hamlet) v Petroleum Geo-Services Inc, 2017 SCC 40 [“Clyde River”]). As the Supreme Court of Canada [“SCC”] has noted, “[a] project authorization that breaches the constitutionally protected rights of Indigenous peoples cannot serve the public interest” (Clyde River). The tribunal cannot ignore that aspect of its public interest mandate.
The AER therefore has a broad implied jurisdiction to consider issues of constitutional law, including the honour of the Crown, as part of its determination of whether an application is in the “public interest”. The question raised by this appeal is whether the AER should have considered the honour of the Crown in relation to the MLAMP negotiations as part of this assessment. A conclusion that legislation precludes considering certain matters does not relieve the decision-maker of its obligation if that legislative interpretation proves incorrect. Nor can a decision-maker decline to consider issues that fall within its legislative mandate because it feels the matter can be better addressed by another body.
The responsibility to ensure the honour of the Crown is upheld remains with the Crown (Chippewas of the Thames First Nation v Enbridge Pipelines Inc, 2017 SCC 41). However, the Crown can determine how, and by whom, it will address its obligations to First Nations, meaning that aspects of its obligations can be delegated to regulatory bodies. Alberta has delegated procedural aspects of the duty to consult and to consider appropriate accommodation arising out of that consultation to the AER. The Government of Alberta has retained the responsibility to assess the adequacy of Crown consultation on AER-regulated projects. Are the matters that FMFN sought to put before the AER in relation to the MLAMP negotiations limited to the “adequacy of Crown consultation”? The Court finds they are not.
The honour of the Crown can give rise to duties beyond the duty to consult. It will give rise to different duties in different circumstances (Haida Nation v British Columbia (Minister of Forests)  1 CNLR 72; Mikisew Cree First Nation v Canada (Governor General in Council), 2018 SCC 40). In the present case, the honour of the Crown is implicated through treaty implementation (Manitoba Métis Federation Inc v Canada (AG), 2013 SCC 14; Mikisew Cree First Nation v Canada (Minister of Canadian Heritage), 2005 SCC 69). The honour of the Crown infuses the performance of every treaty obligation, and stresses the ongoing relationship between the Crown and First Nations brought on by the need to balance the exercise of treaty rights with development under Treaty 8.
There was no basis for the AER to decline to consider the MLAMP process as part of its assessment of the public interest rather than deferring the issue to Cabinet. The public interest mandate can and should encompass considerations of the effect of a project on [A]boriginal peoples, which in this case will include the state of negotiations between the FMFN and the Crown. To preclude such considerations entirely takes an unreasonably narrow view of what comprises the public interest, particularly given the direction to all government actors to foster reconciliation. The AER is directed to reconsider whether approval of the Project is in the public interest after taking into consideration the honour of the Crown and the MLAMP process.