Chief Wallace Fox hopes Canada will settle “omission” of duty

Harvey Strosberg said Canada insisted First Nations go through the government rather than deal directly with oil and gas companies, and Canada failed to protect First Nations’ interests. Now Canada will have to pay.

Strosberg is the lawyer for two Saskatchewan First Nations in a lawsuit against the branch of the federal government responsible for monitoring oil and gas production on or near the First Nations’ territories.

“The government said, ‘We’ll take care of you. We’ll administer that properly.’ Therefore they became a fiduciary in my judgement. And the government didn’t do it properly, and they’re in breach,” Strosberg said.

The Onion Lake Cree Nation and Poundmaker Cree Nation filed a Class Action claim Feb. 9 on the issue of “drainage” of oil and gas reserves from under their territories, and are seeking a total of $3 billion in compensation. 

Drainage comes from well sites located off reserve, but close enough to reserve lands that they are draining oil from pools right underneath the reserve.

Indian Oil and Gas Canada (IOGC) is specifically tasked to work with oil companies that want to engage in oil and gas production that might affect First Nations. IOGC is supposed to carry out the work needed to ensure First Nations are compensated for any loss that they might incur from “drainage.”

But despite that oversite, “First Nations have been losing the minerals around their reserves,” said Onion Lake Cree Nation Chief Wallace Fox.
The key issue at play, according to Strosberg, is that there is one major difference between oil and gas development on First Nations’ land and development on non-First Nations land. This difference is that the federal government has active involvement with First Nations’ oil and gas production, and actually created the system that puts IOGC directly in the middle of the process, rather than allowing the oil companies to go directly to the First Nations.

For example, he said, the federal government, over the years, has filed leases for 40 wells on the Poundmaker Cree Nation, but just off the land, there are more than 240 wells, which are also “sucking up the oil and gas,” said Strosberg. The government should have taken steps to compensate Poundmaker for these wells, but they didn’t, and Strosberg calls this an “omission” of duty.

 “The process has always been oil companies do research, seismic analysis and whatever... Then they approach IOGC and say they want to do exploration or seismic work on A, or B, or C First Nation. And IOGC typically sits with them and goes through regulations and processes etc., and they come to an agreement. Then the Nations, after the fact, are generally contacted,” said Fox.

Over the years, Onion Lake has cultivated a good relationship with IOGC, and Fox said he doesn’t blame them for their mistakes, which he contends is an issue of underfunding. Still, he feels the whole system has often put First Nations people at a disadvantage.
Strosberg said this is the first class action lawsuit of this kind to be filed in Canada, and he hopes it’s the last.

Fox expects, however, that other First Nations will follow in Onion Lake’s and Poundmaker’s footsteps. He’s been hearing stories for years, from other nations dealing with the same issue, and had a number of talks with members of other nations prior to launching this lawsuit.

“There are about 70-plus First Nations in Canada that are going to be impacted by this... And as this comes forward, other First Nations are going to be coming on board to make statements about their concerns, and experiences...  That’s going to happen right through the course of this whole process,” he said.

Fox hopes, because the time and cost of litigation and court proceedings may be challenging—to both the First Nations and the government—the government will want to settle quickly (and fairly) without allowing the court action to carry on.

“Every class action is different, said Strosberg. “But this is the first class action that is in oil and gas with the Aboriginal Nations… There’s been no response yet, but hopefully there is just our class action. I hope the government will discuss it rather than immediately fight it.”