Reconciliation and Regulation

In this post, I want to mark the National Day of Truth and Reconciliation by highlighting two recent Alberta Court of Appeal decisions on reconciliation and regulation. Both treat reconciliation as an integral part of the regulatory enterprise.

Consider first Fort McKay First Nation v Prosper Petroleum Ltd, 2020 ABCA 163. Here, the Alberta Energy Regulator had approved an oil sands project located less than five kilometres from the FMFN’s water reserves. The FMFN argued that the approval should be put on hold pending the completion of FMFN’s negotiations with the provincial government. These negotiations were designed to discharge the Crown’s duty to consult FMFN given the potential interference with Indigenous rights.

The difficulty for FMFN was that the Regulator has no jurisdiction to consider the adequacy of consultation. Section 21 of the Responsible Energy Development Act, SA 2012, c R-17.3 states that the Regulator “has no jurisdiction with respect to assessing the adequacy of Crown consultation associated with the rights of aboriginal peoples as recognized and affirmed under Part II of the Constitution Act, 1982“.

But this did not end the matter: “issues of constitutional law outside the parameters of consultation remain within the AER’s jurisdiction, including as they relate to the honour of the Crown” (at para. 40). Here, the Regulator had made a determination about whether an approval was in the “public interest”. This, the Court of Appeal held, triggered an obligation to consider constitutional law issues: “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”” (at para. 43).

In particular, FMFN had argued that the honour of the Crown was engaged because of treaty implementation (as laid out in the concurring reasons of Greckol JA). This issue, the Court of Appeal held, was within the Regulator’s jurisdiction:

Section 21 does not prevent the AER from considering relevant matters involving aboriginal peoples when carrying out its mandate to decide if a particular project is in the public interest. The issues raised here are not limited to the adequacy of the consultation on this Project, but raise broader concerns including the Crown’s relationship with the FMFN and matters of reconciliation. These issues engage the public interest and their consideration is not precluded by the language of s 21 (at para. 57).

There was no basis for deferring to the provincial government on this issue:

The legislature granted to the AER a broad mandate to determine whether a project is in the public interest; factors to consider include the social and economic effects of the energy resource activity, the effects of the energy resource activity on the environment, and the impacts on a landowner as a result of the use of the land on which the energy resource activity is or will be located: REDA,s 15; REDA General Regulation,s 3. The “public interest” also includes adherence to constitutional principles like the honour of the Crown, and the AER is no less responsible for considering the Crown’s constitutional obligations than is Cabinet. To the extent the MLAMP negotiations implicate the honour of the Crown and therefore need to be considered as part of the “public interest”, the AER was under a statutory duty to consider that issue (at para. 65).

The “public interest” is a broad term, of course, but it is notable that it was understood here as encompassing the honour of the Crown, as a general principle relevant to the interpretation of the Regulator’s statutory mandate. Indeed, “[t]o 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” (at para. 68). The honour of the Crown includes the fostering of reconciliation and both are part of the “public interest”. This sort of reasoning is characteristic of the Canadian approach to the relationship between the Crown and Indigenous peoples: the honour of the Crown serves as a meta-principle, which is specified in s. 35 of the Constitution Act, 1982 and doctrines such as the duty to consult (triggered by a potential breach of s. 35 but grounded in the honour of the Crown), and, now, reconciliation as an interpretive principle.

The second case is AltaLink Management Ltd v Alberta (Utilities Commission), 2021 ABCA 342. The Commission had decided that two limited partnerships controlled by Indigenous peoples should absorb costs they incurred as utility owners.

According to the Court of Appeal, the Commission made two errors. First, it should have considered past savings from routing lines over First-Nations lands, which were more cost-effective:

The Commission misfired when it characterized the cost savings solely from the initial construction phase as irrelevant. The manner in which this project was built necessarily involved a real prospect of forward-looking savings. There were predictable lower maintenance costs for this shorter and more accessible route.  Moreover, the integration of the First Nations’ corporations as operators linked to the larger grid also offered the prospect of further benefits over time as technology improves and the needs of the rate-paying population increase (as, for example, with electric vehicles) potentially involving increased requirements for operational capacity of the system. The benefit for the environment is also ongoing, and not frozen in the past. The Commission, in effect, rejected as speculative the suggestion that the comparatively modest incremental hearing and audit costs would be offset by these future benefits predictably linked to the how the lines were placed and constructed. Seen in this light, the fact that the placement and construction was in the past is not on its own a basis to disregard the predictable future benefits (at para. 55).

Second, the Commission had wrongly disregarded intangible benefits, including the enhancement of life on reserve lands due to economic development:

Indigenous communities benefit when meaningful employment opportunities are available. People who live on reserves need jobs. Meaningful employment keeps families together and thriving. It is a central component of a community that is a safe place in which to reside (at para. 65).

Reconciliation did not feature clearly in the majority’s analysis but in concurring reasons, Feehan JA went even further, seeing reconciliation and the United Nations Declaration on the Rights of Indigenous Peoples as valid interpretive principles to bring to bear on the interpretation of regulators’ mandates:

While reconciliation underlies the honour of the Crown and section 35 rights, it is a distinct concept that exists separately from the honour of the Crown and includes both legal and social dimensions…While reconciliation is a foundational objective of s 35, it is part of the broader public interest and also applies to cases impacting Indigenous peoples outside the constitutional context…Aiming to achieve reconciliation is a continuing obligation, existing separately from honour of the Crown. An important aspect of reconciliation is the attempt to achieve balance and compromise, essential to the consideration of the public good. Reconciliation must be a consideration whenever the Crown or a government entity exercising delegated authority contemplates a decision that will impact the rights of Indigenous peoples…While the Commission is not obligated to consider UNDRIP, it may serve as a useful tool to inform a fuller understanding of reconciliation

This is an expansive view, of course, but treating reconciliation as — in effect — part of the context of statutory text, purpose and context is an arresting proposition well worthy of consideration on a day like today.

This content has been updated on October 7, 2022 at 15:34.