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The Stoney Nakoda First Nation is calling on the National Energy Board to hold off approving an asset swap between TransCanada Corp. unit Nova Gas Transmission Ltd. and Atco Ltd.

Jeff McIntosh/THE CANADIAN PRESS

An Alberta First Nation is invoking a recent Supreme Court ruling over aboriginal land rights, complicating a deal involving two major pipeline companies.

The Stoney Nakoda First Nation, whose reserve lands are in the Rocky Mountain Foothills between Calgary and Banff National Park, said the federal government has not lived up to its constitutional duty to consult, and is calling on the National Energy Board to hold off approving an asset swap between TransCanada Corp. unit Nova Gas Transmission Ltd. and Atco Ltd.

As an intervenor in an NEB hearing into the asset swap, the aboriginal group also demands that an Atco pipeline that runs through its lands to Banff from the Calgary area, but is not part of the exchange, be transferred to TransCanada, so it would be regulated by a federal authority rather than a provincial one.

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The NGTL assets are regulated by the NEB, a national body, and the Atco pipelines by the Alberta Utilities Commission.

As it stands, the swap, in the works since 2009, comprises more than $170-million of assets, split nearly evenly between the two operators. The deal allows the systems to operate under a single set of rates and services and is also aimed at saving costs for the companies, according to NGTL's application.

The Stoney Nakoda are contesting the deal against the backdrop of long-running litigation seeking compensation for what they claim are breaches of aboriginal title and rights by the governments of British Columbia, Alberta, Saskatchewan, as well as Canada and the NEB. The case has been before the courts since 2003.

"They're simply asserting the existence of that claim and putting it before the NEB. We find that with many of these lawsuits, the governments tend to carry on with business as usual and try to pretend that they don't exist," said Douglas Rae, a lawyer representing the First Nation.

"So we're simply putting in our notice – probably as we're obligated to do – that this claim exists. Many of the lines that are part of the swap arrangement are in Stoney Nakoda traditional territory."

The Stoney Nakoda are pressing their case following the Supreme Court's landmark Tsilhqot'in ruling in June, which essentially made it easier for First Nations to establish title over lands that were regularly used for hunting, fishing and other activities prior to contact with Europeans.

The decision places a greater burden on governments to justify economic development on aboriginal land, and numerous companies, including TransCanada, have said they are studying it closely for implications for their development proposals.

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NGTL argues that its swap with Atco will not physically impact Stoney Nakoda – there are no new facilities being constructed. In a filing, the company said the First Nation provided no evidence that the assets in the deal are in its traditional territories.

In addition, NGTL and Atco should not be forced to put pipelines into a transaction they negotiated themselves, the company said.

"The selection of assets to be included was a result of a commercial negotiation, now concluded, and the parties are interested in completing the exchange without delay," TransCanada spokesman Davis Sheremata said. "Adding the line would alter the agreed-to commercial arrangement and negotiations could take significant time."

The Alberta Department of Energy, in its submission, said the NEB hearing is not the appropriate place for the Stoney Nakoda to air the issues in its court action.

Regardless, the intervention is not likely to jeopardize the agreement between the companies, Mr. Sheremata said.

"NGTL has a positive relationship with Stoney Nakoda. NGTL's understanding is Stoney Nakoda is not opposed to the transfer but has broader questions, including ones related to federal provincial jurisdiction, which Stoney Nakoda is taking up with the Crown," he said.

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The NEB is expected to make a decision in 12 weeks from the close of the hearing.

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