First Nations gear up to fight Ottawa for shutting them out in coal-mine rulings

First Nations gear up to fight Ottawa for shutting them out in coal-mine rulings

First Nations are agnostic about coal — but are concerned about the implications for their right to self-determination

Carol Wildcat grew up in the shadow of Imperial Oil Ltd.’s Bonnie Glen oilfield operation on the Pigeon Lake reserve in Alberta. In the roughly 40 years the site was in production, the company extracted billions of dollars worth of oil, and paid a fraction of that in royalties to the four Indigenous nations living near the operation.

It’s something that didn’t sit right with Wildcat.

“We were passive royalty receivers. We never got the jobs, we never got small business developing here. Off reserve, other communities…build up when (resource projects are developed),” she said in an interview. “I’m not going to allow that to happen to us again.”

Today, Wildcat is in a position to build her community up. As the director of the industrial relations department for the Ermineskin Cree Nation, she negotiates impact benefit agreements with resource companies that are looking to operate on her nation’s traditional territory in central Alberta.

One of those impact benefit deals was with Coalspur Mines Ltd., the operator of the Vista thermal coal mine near Hinton, Alta., related to the mine’s expansion in 2019.

So when the federal environment minister Jonathan Wilkinson decided to designate Vista’s expansion under the Impact Assessment Act in June 2020, Wildcat said she took it as a personal affront. The move submitted Coalspur’s proposed open-pit expansion and underground test mine to review by the federal impact assessment agency.

In his decision letter, Wilkinson said Vista “may result in adverse effects of greater magnitude than previously considered,” including direct and cumulative effects to fish and fish habitat, species at risk and Indigenous peoples.

“When I make deals with companies, I look after the environment, I look after the water, I look after the soil. I make agreements where, when they do reclamation, I’m part of it,” Wildcat said.

“We really take into consideration all of those things. And for the minister to have decided on his own…” she trailed off. “I’m not going to make agreements that are going to destroy everything. It’s a fine line we walk.”

Beyond the frustration, she said the designation order came as a complete surprise.

“There was no correspondence,” she said. “They didn’t call me.”

Last year, the Ermineskin took Wilkinson to court, asserting that the minister had failed to consult the nation before making his decision. Designating the Vista project, the Ermineskin argued, impacted the community’s Aboriginal and treaty rights by lessening, delaying or eliminating its economic interest in the expansion.

In mid-July, federal court judge Henry Brown quashed Wilkinson’s order. The Ermineskin had been “inexplicably frozen out” from a “one-sided process,” Brown wrote, as the minister only consulted Indigenous communities who’d sought the order.

The court decision may play a role in two First Nations’ leaves to appeals to a joint federal-provincial review panel decision that denied Benga Mining Ltd. permits for its proposed Grassy Mountain metallurgical coal project in southwest Alberta. On Aug. 6, Wilkinson formally blocked the project, saying it’s “likely to cause significant adverse environmental effects.”

Both the Piikani Nation and Stoney Nakoda Nations are arguing the joint review panel failed to properly consult them.

The court’s ruling has caught the attention of legal experts and Canada’s coal industry, who say it could have implications for Indigenous communities who support resource development. PHOTO BY REUTERS/DANE RHYS/FILE PHOTO

“It’s a strange decision to make given the courts just told them on Coalspur that you do have to consult before you stop these things,” said Ryan Robb, chief executive officer of the Stoney Tribal Administration, which is comprised of the Bearpaw, Chiniki and Wesley Tribes. “It seems to fly in the face of what just came down from the courts.”

The proposed Vista expansion, which would nearly double the mine’s production capacity from 6.5 million tonnes of thermal coal annually to between 10 and 15 million tonnes, is currently not subject to federal review. However, the Impact Assessment Agency of Canada sent out letters to affected First Nations on Aug. 3, which cite the Ermineskin’s court win and seek feedback on another potential designation order by Aug. 23.

In a letter viewed by the Financial Post, a senior consultation advisor for the agency said the IAAC was seeking ”any additional views regarding potential beneficial and adverse impacts to your community” in order to inform the minister’s decision.

“In as much as there was an error in not consulting the Ermineskin enough, certainly it’s a good course of action to restart the process and consider submissions from all sides, and make that decision again,” said David Khan, senior staff lawyer at Ecojustice’s Calgary office. Ecojustice advocated for Wilkinson to designate Vista last year and represents the Niitsitapi Water Protectors, Canadian Parks and Wilderness Society of Southern Alberta and the Livingstone Landowners Group, which oppose coal development.

He added that while the court had detailed potential economic ramifications of the designation order, “it’s not a final decision. It’s simply a decision that the federal environment minister has decided (the project is) large enough in scope that it requires a federal impact assessment.”

Wilkinson said in June the federal government would no longer approve any new or expanded thermal coal projects due to their “unacceptable environmental effects.”

In the Ermineskin decision, Brown dismissed Wilkinson’s contention that he had no obligation to consult the Nation, writing that it was clear the Crown’s duty to consult is triggered by Indigenous economic rights that emerge indirectly from Aboriginal and treaty rights — such as the Ermineskin’s impact benefit agreement with Coalspur.

That finding has caught the attention of legal experts and Canada’s coal industry, who say it could have implications for Indigenous communities who support resource development.

“We’ll be wrestling with how broadly to read this decision, but I think it’s tremendously interesting to say an economic interest is protected by the duty to consult, and it has a lot of potential,” said Dwight Newman, a professor at the University of Saskatchewan’s College of Law and the Canada Research Chair in Indigenous Rights in Constitutional and International Law.

“There would probably be people out there who will think of this in terms of the duty to consult now offering protection to Indigenous communities who want to say yes to resource projects, as well as those who want to say no,” he said. “That introduces a bit of a different matrix around decision-making on resource projects.”

Historically, the duty to consult legal doctrine has been a requirement that government consult Indigenous peoples, and accommodate their concerns where possible, when there’s the potential for an adverse impact on an Aboriginal or treaty right.

“Usually that’s been related to a question about, ‘could a resource project harm some Aboriginal or treaty right, like a right related to land or traditional harvesting practices?’” said Newman. “It’s looking really at only the downside of resource projects, in a sense.”

John Olynyk, a partner at Lawson Lundell LLP in Calgary and a member of the firm’s Indigenous, environmental and project development practice groups, said the case may mark the first time an impact benefit agreement have been used to demonstrate an Indigenous group’s economic interest in a project.

While previous court decisions have established the duty to consult may be triggered by an Indigenous community’s economic interests, that’s often been focused on the economic aspects that arise from hunting, fishing, trapping and gathering, rather than broader economic rights.

“It makes sense to me, but it’s just been an interesting development, especially given these are very typically confidential and closely held,” Olynyk said.

Khan said the decision introduced a “new concept” that all sides will have to think about, but both the Vista decision and the Grassy Mountain leaves to appeal highlight the problems with impact benefit agreements. He noted the agreements are seen as so confidential that they were not disclosed in either case, and were instead only referred to, which means First Nations community members and judicial bodies don’t truly know what benefits they contain.

It’s something he said is part of the larger issue of colonialism in Canada, which he traced back to the Indian Act. “It’s still the most powerful governing document held over First Nations, and the colonial pressure limits their economic opportunities in other ways and forces them, in my view, into these IBAs where they feel there’s no other way of gaining benefit from these projects that, historically, have just been pushed through anyway.”

Wildcat said she was “excited” by the judgment. “Our economies have expanded, our way of living has changed and been altered — I still have treaty rights, I still hunt, I still gather, I still do ceremony (and) have a connection to the land, but I’m moving forward economically, where I’m trying to expand how we generate dollars for economic development,” she said.

The leaves to appeal the Grassy Mountain decision have surfaced similar issues around consultation.

The project, near Crowsnest Pass, would produce about 4.5 million tonnes of processed coal per year over a 23-year life. Benga, a subsidiary of Australia-based Riversdale Resources Ltd, has said it would create about 500 jobs during its two-year construction phase and 385 full-time mining jobs during operation.

In its June 17 decision, the joint review panel said the mine’s likely selenium impacts posed too great a risk to southern Alberta’s water supply. It specifically cited the headwaters of the Oldman River in southern Alberta, which flows east from the Rocky Mountains and eventually joins up with the Bow River to form the South Saskatchewan River.

The review panel highlighted selenium’s risk to the westslope cutthroat trout, a species that in Alberta is listed as threatened under the Species at Risk Act and Alberta Wildlife Act. It expressed doubt about Benga’s claims that its selenium-treating technology could capture up to 98 per cent of released selenium, calling those estimations overly optimistic and its mine reclamation plans vague.

The panel said the project would also have potential adverse impacts on local First Nations’ physical and cultural heritage.

But the Piikani’s legal filing said the review panel had relied on a ruling from an Alberta government office, which said consultation with First Nations had been adequate, rather than speaking directly with the Nation.

“We were never consulted by the joint review panel directly,” Piikani Chief Stanley Grier told the Canadian Press in July. “Nobody speaks on behalf of the Piikani Nation but ourselves.”

Robb, meanwhile, said the Stoney Nations are “agnostic” on coal, and have stressed their strong opposition to coal mining in the Rockies’ eastern slopes. But they’re concerned about the implications for First Nations’ right to self-determination. Robb said the Nations also felt they had no choice to appeal because they’re currently in the midst of an Aboriginal title claim legal case, regarding their traditional use of the eastern slopes, and the JRP decision minimized their claim.

“If the AER is able to dismiss an agreement that we’re in support of, that also could (mean) anything we disagree with, they could push it through…and claim they’re doing it in our best interest,” he said.

The Grassy Mountain, Alberta looking south west. PHOTO BY THE CANADIAN PRESS/HO-RIVERSDALE RESOURCES

“Certainly it’s concerning that what it’s really (saying) is we’re not competent enough to make our own decisions or know what’s good for us,” he said.

But, Khan said, the JRP process is quasi-judicial, and isn’t obligated to consult before making a decision; parties make their submissions and it’s up to the panel to weigh the evidence they’ve heard directly. He noted the Piikani relied on its letter of non-objection, and the Stoney Nakoda participated in the review.

“Many of the bases the Piikani and Stoney Nakoda (cite as) grounds for review, they’re couching it in mistakes of law…and not consulting enough, but in fact (the panel was) weighing the evidence before them provided by all parties,” he said, adding that the panel’s findings of fact will be given deference by the provincial court of appeal.

The review panel declined the Financial Post’s request for comment.

Benga itself is appealing the JRP decision, and said in a statement on Monday it was reviewing Wilkinson’s decision statement with legal counsel. The company said it wrote to the minister in late June to request he hold off making any decisions while the company pursued its appeal, but received no response.

Robb said the Grassy Mountain decision could have ripple effects for broader resource and project development. “What happens with industry if they’re no longer required to consult with us, because even if industry and First Nations come to an agreement, the government now seems to hold a veto of convenience?”

Tristan Goodman, president of the Explorers and Producers Association of Canada, which represents oil and gas start-ups, juniors and large producers, said the cases should be seen in the broader context of governments, over the years, downloading consultation obligations to industry, despite the duty to consult being a Crown responsibility.

“I’m not saying (consultation) is a simple, easy thing for governments to do…but the reality is the outcome is the same,” he said. “Governments have not lived up to their legal obligations here and will need to improve on that going forward.”

The result, he said, is “significant uncertainty” for resource sector companies, investors, affected Indigenous communities and the broader public.

Both the Grassy Mountain appeals and the Ermineskin decision have come at a turning point for Canada’s coal industry. Canada was the seventh larger exporter of coal in the world in 2019, shipping 36 million tonnes of coal, according to Natural Resources Canada.

World leaders face increasing pressure to rapidly eliminate the use of fossil fuels. A report by the Intergovernmental Panel on Climate Change, released Monday, warned temperatures will likely exceed the Paris Accord’s 1.5 degree Celsius limit within the next 20 years without drastic action.

In Alberta, the provincial government is consulting on a new approach to coal after walking back its elimination of the 1976 coal policy, in response to intense backlash from a broad coalition of Albertans who objected to coal projects in the eastern slopes of the Rockies. In recent months, the federal government has taken a harder line on thermal and metallurgical coal projects as part of its plans to achieve net-zero emissions by 2050.

“The continued mining and use of thermal coal for energy production in Canada and around the world runs counter to what is needed to effectively combat climate change,” Wilkinson said in an emailed statement to the Post when the Ermineskin decision was delivered.

Wilkinson said he would “continue to consider” the thermal coal policy in deciding whether to designate future thermal coal projects under the federal impact assessment act.

“You can see there’s a policy element behind the decisions,” said Olynyk.

Piikani chief Grier has acknowledged that, among his community, support for Grassy Mountain isn’t unanimous. Mountain Child Valley Society chair Adam North Peigan, a member of the Piikani, has alleged Benga only consulted with the Nation’s government, but the majority of the community is opposed.

Both Vista and Grassy Mountain, as well as other proposed coal projects in Alberta such as the Tent Mountain metallurgical coal project, face substantial opposition from a number of First Nations governments and grassroots groups.

“Projects that will have adverse effects on Niitsitapi ways of life, culture and rights should not proceed and we are grateful that the panel acknowledged the severe impacts a project such as this would have on Indigenous peoples,” Latasha Calf Robe, founder of the Niitsitapi Water Protectors and a member of the Blackfoot Confederacy, in a press release after the JRP rejected Grassy Mountain.

Wildcat said her support for Vista’s expansion is also more complicated. Coal mines had operated around Hinton for decades, causing permanent damage to the environment and waterways — including a significant tailings dam failure from the Obed Mountain mine in 2013 that spilled into tributaries of the Athabasca River, which Wildcat said the Ermineskin wasn’t immediately told about.

It wasn’t until the Nation began getting involved in consultations that she felt it had more control in how those projects were managed and reclaimed.

“It was (previously) only between them and the province, or them and Canada. It was never us being part of a partnership where we can…make sure that the environment stays as close as possible to how it was, because it’s already been damaged,” she said.

“That’s why we have those agreements — so that we, too, can keep tabs.”


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