Supreme Court ruling on native land claims adds to uncertainty for pipelines

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A Supreme Court ruling on aboriginal land rights welcomed by First Nations ratchets up uncertainty for Canada's oil and gas industry and its quest to build pipelines to get more Canadian products to foreign markets.

"The climax of native empowerment has arrived," said Bill Gallagher, a lawyer who examines conflicts between First Nations and energy developers.

"It's not going to be business- as-usual for [energy] proponents."

The ruling gives aboriginal groups greater control over ancestral lands they claim, and requires their consent to be given for how those lands are used. Mr. Gallagher said it gives B.C. aboriginal communities opposed to Enbridge Inc.'s Northern Gateway project the power to say: "We don't have to talk to you until the province comes along and asks for our consent."

The ruling will apply mostly to British Columbia, where there are almost no treaties and where the concept of aboriginal titles plays a key role.

Former B.C. Attorney-General Geoff Plant, now counsel in Vancouver at law firm Gall Legge Grant & Munroe LLP, called the court's decision "transformative" for the province.

Mr. Plant, also a board member at Steelhead LNG Corp., emphasized that resource extraction remains viable in British Columbia, but governments and businesses need to take aboriginal interests more seriously.

"The aboriginal owners of those lands need to be included in the arrangements because without their consent, it's going to be very difficult to develop aboriginal title lands," he said. "If First Nations decide that they don't want a certain type of economic development activity on their lands because they don't want the impact from that activity, this case makes it pretty close to impossible to imagine a situation where that activity will be permitted."

However, aboriginal lawyer Thomas Isaac, a partner with Osler Hoskin & Harcourt LLP, said the ruling is significant in that it is the first on established aboriginal title, but is site-specific and won't affect projects such as Northern Gateway. "It's not a game changer. It doesn't change the law. It does give further insight, though, into the law."

The Lubicon Lake First Nation in northern Alberta, which has also never signed a treaty with the crown, has been fighting a number of energy projects in what it describes as 10,000 square kilometres of traditional territory, including fracking operations near local lakes. It has filed a lawsuit against the province and Ottawa seeking compensation for oil and gas already extracted, and has also told seven energy companies with projects in the area that plans will be opposed until they have the First Nation's consent.

"This is an absolute affirmation of the position the Lubicon have held all along," said Lubicon communications co-ordinator Garrett Tomlinson. "We're hopeful and we're confident that this ruling will allow First Nations to protect their lands and to protect their interest in those lands with a lot more authority."

Alex Ferguson, vice-president of policy and performance at the Canadian Association of Petroleum Producers, expressed optimism about the document, saying it "speaks for the need for governments working together to come forward and fulfill those obligations." He said he still hopes that most energy projects and land issues will be worked out through relationship building rather than in the courts.

"The only thing I would worry about is unnecessary overreaction," he noted, saying that an aboriginal community or government could seize on the ruling to stop a project.

Enbridge Inc. didn't return requests for comment on the potential impact to the Northern Gateway project. TransCanada Corp., the pipeline company behind the proposed Energy East project –expected to bring 1.1 million barrels per day of western crude to refineries and export terminals – said it is reviewing the Supreme Court decision. If built, Energy East would traverse the traditional territory of 180 Canadian aboriginal communities.

"We will continue to act pro-actively on our responsibility to consult and build relationships with aboriginal communities near our proposed projects," said the statement from spokesman Davis Sheremata. "This decision will not change that commitment."

Other industry groups said the court's decision provides much-needed clarity for aboriginal title.

Intervenors in the court case, including the Business Council of British Columbia, issued statements Thursday to emphasize engagement and reconciliation with First Nations. "The business council notes that our member companies have, for the past two decades, negotiated and implemented hundreds of agreements that seek to provide investment certainty and shared benefits with First Nations," said council president Greg D'Avignon. "In addition, the government of British Columbia has a significant number of economic reconciliation tools, including revenue sharing."

The Mining Association of B.C. and the Council of Forest Industries also said they recognize the importance of working closely with First Nations. British Columbia will still be an attractive jurisdiction for miners, said Karina Brino, president of the Mining Association of B.C.