Crown Consultation Obligations and a National Infrastructure Corridor: Simple Meets Complex

By: David V. Wright

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Matter Commented On: National Infrastructure Corridor

Renewed interest in a cross-Canada infrastructure corridor has surfaced in recent months and weeks, including as a federal election issue. Details were thin in the recent Conservative campaign announcement, but a substantial amount of information about a similar concept can be found in a 2017 report from the Senate Committee on Banking Trade and Commerce (the focus of the former is on an ‘energy corridor’ while the focus of the latter and the below-cited article by Sulzenko and Fellows is on a multi-modal infrastructure corridor). That report rightly acknowledges that “such a major undertaking – which would require the accommodation of a multitude of varying interests and priorities – would undoubtedly be difficult to complete, and a number of complex issues – including in relation [to] Indigenous peoples, financing and the environment – would need to be addressed” (p 12). In this post, I provide a brief overview and initial comments in relation to a fundamental “complexity” pertaining to the corridor concept: Crown consultation and accommodation duties with respect to the Indigenous peoples of Canada. Continue reading →

Latest Municipal Utility Appeal Decision by the AUC: Business as Usual

By: Dana Poscente

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Decision Commented On: Village of Delia: Appeal of Utility Charges by Heide Peterson and Yvon Fournier, October 1, 2019, Alberta Utilities Commission Decision 24678-D01-2019

In this recent municipal utility appeal, Ms. Peterson and Mr. Fournier (the Appellants) requested that the Alberta Utilities Commission (AUC) disallow all water, sewer, garbage and land fill utility charges imposed by the Village of Delia, including interest, from the time at which they disconnected from municipal utility service to the time of this decision. The AUC found, pursuant to section 43 of the Municipal Government Act, RSA 2000, c M-26 (MGA), that certain of the appealed charges were discriminatory and ordered Delia to repay them. This post describes the statutory scheme under which the Commission can hear and make orders on such appeals, summarizes the decision, and compares the reasoning and outcome to similar past decisions.

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Two New Offset Well Cases

By: Nigel Bankes

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Cases Commented On: Canadian Natural Resources Limited v Lisafeld Royalties Ltd., 2019 SKQB 201 (Can LII); Whitecap Resources Inc. v Canadian Natural Resources Limited, 2019 ABQB 698 (Can LII)

This post examines two recent decisions dealing with offset well obligations under petroleum and natural gas leases. An offset well obligation is a clause in a lease that requires the lessee to drill a well on the leased lands where production has been obtained from a contiguous property and there is no similar well on the leased lands producing from the same formation. The purpose of the clause is to protect the lessor from the risk of drainage (i.e. where the well on the neighbouring property is or may be capturing hydrocarbons from under the lessor’s lands). While the primary obligation of the lessee is to drill to the target formation, more modern versions of the clause create additional options and allow the lessee instead of drilling to surrender all or some part of the lease, or pay a compensatory royalty to the lessor (i.e. a royalty paid on the production on the offsetting well as if it were occurring on the leased lands). This compound obligation is frequently described as drill, drop or pay obligation. Continue reading →

Clean-up Liability for Wells in the Mackenzie Delta

By: Nigel Bankes

PDF Version: Clean-up Liability for Wells in the Mackenzie Delta

Case Commented On: ConocoPhillips Canada Resources Corp and Shell Canada Limited, 2019 ABQB 727 (CanLII)

Gulf, Conoco’s predecessor, undertook exploratory drilling in the Mackenzie Delta in the 1970s including the seven wells referenced in this case, most particularly the I-37 well. The wells had sump pits for the disposal of drilling waste and fluids. In 1973 Gulf obtained approval to suspend the I-37 well and fill the top two thousand feet of casing with diesel fuel. Gulf subsequently abandoned the I-37 well in the mid-1980s, installing a cement plug, but by then the diesel oil (at para 29) “was no longer in place”. “All of the well sites received final clearance under the Territorial Lands Use Regulation, CRC, Vol XVIII, c 1524, p 13645, ss 18, 33(5), 37 in September, 1986. This approval meant that the site had been satisfactorily reclaimed and the regulator was satisfied that the conditions of the land use permit had been met.” (at para 29) Prior to abandonment Gulf had used the data from these wells to procure significant discovery licences (SDL) under the terms of the Canada Petroleum Resources Act, RSC, 1985, c. 36 (2nd Supp) for some of its properties. Continue reading →

TMX Litigation Takes an Unusual Turn at the Federal Court of Appeal

By: David V. Wright, Martin Olszynski, and Nigel Bankes

PDF Version: TMX Litigation Takes an Unusual Turn at the Federal Court of Appeal

Case Commented On: Ignace v Canada (Attorney General), 2019 FCA 239 (CanLII)

Last week, the Federal Court of Appeal (FCA) issued another ruling in the TMX saga dealing with the consolidated challenges to the Trans Mountain pipeline expansion (TMX) project. This decision comes just three weeks after Raincoast Conservation Foundation v Canada (Attorney General), 2019 FCA 224 (Can LII) (Raincoast), where the FCA granted leave to six parties to commence judicial reviews challenging the Governor in Council’s decision to re-approve the Trans Mountain Expansion (TMX) project. In this most recent decision, Justice David Stratas concluded that two of those six parties, Tsleil Waututh Nation (TWN) and Squamish Nation (Squamish), had filed applications that went beyond the narrow parameters set out in the September 4thcourt order granting leave. Accordingly, the Court issued an order allowing both parties to file amended notices of application that comply with the restrictions in the initial order. In this post, we briefly summarize this latest and fairly unusual development and conclude with a brief comment on what might have led counsel to push the boundaries in this matter. Continue reading →