An obscure lawsuit filed recently in BC Supreme Court raises new questions about the legal implications of British Columbia’s aboriginal treaty process.
On September 20, the Fort Nelson First Nation filed a notice of claim against British Columbia and the attorney general of Canada in relation to land agreements that don’t include mineral rights.
The Fort Nelson First Nation, which is a member of the Treaty 8 Tribal Association, is a community of 768 in a part of B.C. that’s recently become a hotbed for business and investment activity thanks to massive reserves of shale gas.
According to the claim, the Fort Nelson entered Treaty No. 8 in 1910, but negotiations for reserve land between the native group, Canada and B.C. didn’t begin until the 1950s.
At that point, the Fort Nelson claim they directed the federal government to make sure the reserve land included mineral rights.
In 1961, B.C. transferred the land to the federal government to hold in trust for the Fort Nelson, but B.C. kept the mineral rights, the claim states.
The Fort Nelson argue Treaty 8 did not provide for the “exclusion” of mineral rights.
“When lands were set aside for reserves throughout Canada outside of British Columbia, mineral rights under the reserve lands were set aside for the benefit of the First Nations associated with these reserve lands,” the notice of claim said.
Gas reserves were subsequently discovered beneath the Fort Nelson’s reserve land, and the claim alleges that B.C. collected royalties from energy companies on the land but none of those royalties were forwarded to the First Nation.
Then in 1980, the Fort Nelson approved a minerals agreement, which saw the province retain 50% of the mineral rights to the lands while the other 50% were obtained by Canada and transferred to the First Nation.
The agreement also required the Fort Nelson to give up any further claim to the minerals, according to the suit.
Now, the Fort Nelson want a declaration that Canada breached its fiduciary duty when it originally acquired the reserves without the mineral rights, and another declaration that it breached its agreement when it later “encouraged and signed a release on behalf of the Fort Nelson” in exchange for 50% of the mineral royalties.
A declaration that B.C. breached its fiduciary duties when it kept the mineral rights has also been sought, as well as a rescission of the minerals agreement.
Neither the Fort Nelson nor its legal representative could be reached for comment by press time, but a statement from B.C.’s Ministry of Energy, Mines and Petroleum Resources said the issue around sub-surface ownership between Canada and B.C. on reserves is “relatively complicated”.
The province said it has similar 50-50 royalty agreements with the Blueberry River and Doig River First Nations (also Treaty 8 members), and royalty branch staff “regularly” notify the ministry about royalties that flow from drilling activity on reserve.
Caroline Findlay, an aboriginal law expert and partner at Blake Cassels & Graydon LLP in Vancouver, said the suit is somewhat unique in its facts and is unlikely to have major implications for B.C.’s treaty process.
But she did say it’s further sign that legal questions around mineral tenure create investment risk in B.C., and much of B.C.’s treaty process has slowed to a crawl.
“We’re in a big holding pattern because First Nations are not necessarily advancing their title claims right now … I think it’s a more manageable way to get a chunk of some wealth related to the oil and gas,” Findlay said.
Kenneth Tyler, a partner with Borden Ladner and Gervais LLP, said similar suits could send a message to government that treaties can’t be relied on to definitively settle land claims.
“The more lawsuits that challenge those assumptions; the less incentive there is to enter those treaties and spend a lot to enter them,” Tyler said.
Geoff Plant, B.C.’s former attorney general, said treaties should not be viewed as agreements that definitively answer all questions but as living documents that are open to change over time.
“There’s going to be litigation forever about the interpretation of land claim agreements, the old ones as well as the news ones,” said Plant, now a partner with Heenan Blaikie LLP. “The parties should do the best job they can to do a deal that can survive that level of scrutiny, but it’s a mistake to expect perfection from these processes.”