The chief of a First Nation that is suing the federal government for allegedly failing to protect the community's oil and gas reserves says his people have seen the few wells on their lands run dry as companies drill for oil on adjacent properties.
Duane Antoine, chief of the Poundmaker Cree Nation near North Battleford, Sask., said Tuesday, the day after the class-action suit was filed in federal court, that there were many wells pumping oil on the reserve in 2000.
"Since then, they have been running out," Mr. Antoine said. "The First Nation has fences on the border but the oil doesn't stop there. So our oil wells have been depleting quite a bit. Actually, they are shutting down."
The Poundmaker Cree Nation and the Onion Lake Cree Nation, which straddles the borders of Saskatchewan and Alberta, launched the suit saying Ottawa owes First Nations an estimated $3-billion.
The First Nations accuse the federal government and Indian Oil and Gas Canada (IOGC), an agency of the Indigenous Affairs department, of negligence, breaching their fiduciary duties to the First Nations by failing to properly exploit oil and gas on reserves and failing to prevent their resources from being drained away without compensation.
Mr. Antoine said he received calls from the leaders of other First Nations on Tuesday expressing interest in the case.
The Indigenous Affairs department said late Tuesday that it takes such claims very seriously and is currently reviewing the details of the lawsuit but is not in a position to comment further.
The potentially costly legal action comes at a time when the Liberal government of Justin Trudeau, which is facing rising deficits, has promised to reset the relationship with indigenous people and to find ways to increase their revenue. Jim Carr, the Minister of Natural Resources, is set to deliver opening remarks Wednesday at a forum on energy sponsored by the Assembly of First Nations in Vancouver.
Perry Bellegarde, national chief of the AFN, issued a statement Tuesday that commended the Poundmaker and Onion Lake First Nations for initiating the lawsuit.
"Based on our natural-resource wealth, First Nations should be among the wealthiest in Canada," Mr. Bellegarde said. "But federal mismanagement and neglect of its fiduciary duties has resulted in lost revenue for First Nations, perpetuating a cycle of poverty. I encourage the Crown to begin negotiations in good faith with all parties involved, to work towards a reconciliation that honours First Nations title and rights."
Under the Indian Oil and Gas Act, the Indigenous Affairs department has the power to regulate and manage the development of oil and gas on reserves. In 1987, IOGC was established with a mandate to identify oil and gas deposits that are both on and adjacent to reserves, to promote those resources to oil-and-gas companies, to negotiate drilling deals and to collect the revenues for the First Nations.
The statement of claim, which contains allegations that have not been proved in court, says the IOGC is under-resourced and, as a result, has done none of those things particularly well. But of special concern to the indigenous communities, says the claim, is the agency's failure to monitor the wells being drilled around reserves and to demand compensation for the losses that First Nations have incurred when adjacent wells have drained away oil and gas from under their lands.
Although the lawsuit is new, the issue of drainage is one that has been causing consternation for chiefs for decades. Wallace Fox, the chief of Onion Lake, says he asked officials with the IOGC to do something about the problem but received no response.
Last June, the Gamblers First Nation in western Manitoba launched its own suit against the province and Tundra Oil and Gas Partnership for wells that the company drilled next to the reserve.
Gamblers chief David LeDoux said Tuesday that steps are being taken to add the federal government to the list of those being sued.
"Our lands," he said, "are entrusted to them to look after us."
The Manitoba government, which receives the taxes from resource revenues in that province, is benefiting from the oil and gas that is being drained from under the reserve land but the First Nation is not, he said.
Jim Tanner, who has a degree in resource economics and who has spent 30 years working in Canada's oil and gas sector, is advising the Gambler First Nation in their legal dispute. He said he warned the chief and council that their gas and oil would be drained by the wells drilled just outside the reserve.
Mr. Tanner said he has seen oil wells lose pressure as a result of another well that was drilled "almost a mile away," and "we couldn't produce the oil. It was gone."