Canada: Aboriginal Law @ Gowlings: March 22, 2012 - Newsflash

Last Updated: March 28 2012

Edited by Maxime Faille

In this issue:

  • Yukon Court determines Crown does not owe fiduciary obligation to negotiate settlements of land claims
  • Federal Court denies Attawapiskat First Nation's Request for an Interlocutory Injunction
  • Alberta Court Of Appeal Grants Alberta Métis Hunter Leave To Appeal Wildlife Offences
  • Ontario Superior Court Grants Injunction And Orders Project Proponent To Consult
  • CRA Provides Position On The Tax Treatment of Interest Income Earned by Status Indians and Bands

Yukon Court determines Crown does not owe fiduciary obligation to negotiate settlements of land claims

By: Scott A. Smith

Ross River Dena Council v. Canada (Attorney General), 2012 YKSC 4


On January 31, 2012, the Yukon Territory Supreme Court issued its judgment in the first phase of a trial in which it was asked to determine whether terms and conditions set out in the June 23, 1870, Rupert's Land and North-western Territory Order ("1870 Order") give rise to a justiciable right requiring the Crown to negotiate settlement of First Nations land claims in the Yukon, and if so, whether the Crown's obligations were of a fiduciary nature.   


The Ross River Dena Council ("RRDC") is a band within the meaning of the Indian Act, and the RRDC and its members are part of the Kaska Nation. The issues in this action concern the portion of the Kaska's claimed traditional territory located in Yukon, which was, prior to 1870, part of the North-western Territory.

In 1867, Parliament requested Her Majesty to unite Rupert's Land and the North-Western Territory with Canada, and to grant Parliament the authority to legislate for the welfare and good government of the new Territories ("1867 Address").  The 1867 Address provided:

And furthermore, that, upon the transference of the territories in question to the Canadian Government, the claims of the Indian tribes to compensation for lands required for purposes of settlement will be considered and settled in conformity with the equitable principles which have uniformly governed the British Crown in its dealings with the aborigines.

The Kaska Nation is one of the Aboriginal peoples of Canada, and the tribe is one of Indian tribes referred to in the 1867 Address.

The North-Western Territory, including the portion of the Kaska's claimed traditional territory located in the Yukon, was admitted into Canada on July 15, 1870. The 1870 Order provided:

It is hereby ordered and declared by Her Majesty...the said North-Western Territory shall be admitted into and become part of the Dominion of Canada upon the terms and conditions set forth in the first hereinbefore recited Address [the 1867 Address]

The Kaska's claims (and thus RRDC) to compensation for lands required for the purpose of settlement have not been resolved.

Issue #1: Were the terms and conditions referred to in the 1870 Order concerning "the claims of the Indian tribes to compensation for lands required for purposes of settlement" intended to have legal force and effect and give rise to obligations capable of being enforced by a court of law?

The Court held that the 1870 Order did not give rise to a justiciable right requiring the Crown to negotiate settlement of RRDC's land claims in the Yukon. The Court's answer largely turned on expert evidence adduced by the Crown, which established that Parliament did not intend to create a justiciable right in drafting the 1867 Address and in enacting the 1870 Order.

The Court also briefly considered how the honour of the Crown impacted the analysis of whether the relevant provision was intended to be and is currently justiciable. In this respect, the Court held that:

...the honour of the Crown would not have been considered a justiciable principle at that time and in the specific context of the 1870 Order. Today, the principle of the honour of the Crown is clearly justiciable. Is the contemporary principle capable of breathing life into the relevant provision in such a way as to render it currently justiciable and enforceable in this Court? Perhaps, but the argument, if there is one, was not pursued by RRDC.

The Court also agreed with an argument advanced by Canada that the relevant provision in the 1870 Order cannot create an obligation to negotiate treaties, and that Canada retains the discretion to decide if, when, and how to negotiate, as a matter of Crown prerogative.

Issue #2: If the 1870 Order gives rise to an enforceable obligation, are the obligations of a fiduciary nature?

The Court addressed this issue in the alternative, holding that even if the relevant provision in the 1870 Order gives rise to legally enforceable obligations, those obligations are not of a fiduciary nature. 

In arriving at this conclusion, the Court applied the two-part test developed by the Supreme Court in Wewaykum Indian Band v. Canada, 2002 SCC 79 for the creation of a fiduciary obligation (identification of a cognizable Indian interest, and the Crown's undertaking of discretionary control in relation thereto in a way that invokes responsibility "in the nature of a private law duty").

With respect to the first branch of the test, the Court held that the RRDC failed to establish at the time of the undertaking there was a specific, cognizable Indian interest in the claimed Territory, which was known to the Canadian government, and was in the nature of a private law interest.

The Court also held that the RRDC failed to establish an undertaking by the Canadian government to forsake the interests of other groups and individuals and to act in RRDC's best interests when exercising discretionary control over the Territory. Rather, based on the wording of the 1867 Address, the Court found that Canadian government was acting in the best interests of the Canadian public at large.

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Federal Court denies Attawapiskat First Nation's Request for an Interlocutory Injunction

By: Scott Robertson


Attawapiskat First Nation v. Canada, 2012 FC 146

This case arose from the housing crisis in Attawapiskat First Nation ("AFN"), and the federal government's decision to appoint a third-party manager to oversee and administer AFN's finances. 

In response to the Ministers' actions, AFN sought an injunction against the Minister of Aboriginal Affairs and Northern Development from imposing third party management or to otherwise restrict the authority of a third party manager appointed by the Minister.

The Court applied the tripartite test established in RJR-MacDonald Inc. v. Canada (Attorney General) which requires the applicant for an injunction to establish:

  1. there is a serious issue to be decided;
  2. irreparable harm would be caused to the applicant absent an injunction; and
  3. the balance of convenience favours the granting of injunctive relief.

The Court determined there was a genuine dispute as to the terms of the funding agreement and to the characterization of the relationship between AFN and the third party manager and that there was a serious issue to be determined. 

With respect to irreparable harm, AFN characterized the use of the funds to pay for the third party manager as causing irreparable harm.  The Court determined that irreparable harm had not been sufficiently established and that any damages to the AFN could be compensated for by the Minister.  Finally, the Court found that the balance of convenience was genuinely even and there was no evidence of problems with the third party manager impacting the people of AFN.

Therefore, the Court did not issue an injunction as requested by AFN, subject to the Minister and the third party manager complying with the terms of an Order for the delivery and installation of temporary trailers to address the immediate housing concerns.

The Court noted that AFN did not have to accept, acquiesce, or acknowledge the legality of the third party manager appointed by the Minister for the purposes of securing payment for the delivery of the trailers.

The Court also left open the opportunity for AFN to seek a judicial review of the Minister's decision at a later date.

* * * * * * * * * *

Alberta Court Of Appeal Grants Alberta Métis Hunter Leave To Appeal Wildlife Offences

By: Paul Seaman

R. v. Hirsekorn, 2012 ABCA 21


On January 23, 2012, the Alberta Court of Appeal granted Métis hunter Garry Hirsekorn leave to appeal his 2010 summary convictions for hunting outside a regular season and being in possession of wildlife without a valid wildlife permit contrary to the Alberta Wildlife Act.

The convictions were originally entered in provincial court.  The trial judge found that the political intent to commit wildlife offences in order to be charged and raise constitutional defenses to establish Métis rights in southern Alberta was an impermissible collateral attack on the Wildlife Act.  He also held that the Métis had established no significant presence or historic rights-bearing community in what is now southern Alberta because the area was regarded by the Métis as "too dangerous" prior to Crown control.  Consequently, the site-specific and pre-control requirements of the Supreme Court's test for Métis rights from R. v. Powley could not be satisfied.  The appellant had sought to define a mobile and nomadic historic rights-bearing community in southern Alberta rather than a site-specific one.

While the summary conviction appeal judge reversed the trial judge's holding on collateral attack and held that the appellant was entitled to raise constitutional defenses in these circumstances, he declined to identify any particular Métis community when applying the Powley test.  He also noted that the judicial authority associated with Powley did not appear to allow him to recognize a mobile Métis community or a different notion of the "pre-control" requirement. 

The appellant sought leave to further appeal his summary convictions to the Alberta Court of Appeal.  However, the Alberta Provincial Offences Procedures Act only allows further appeals on questions of law of "sufficient importance to justify a further appeal." 

In support of meeting this requirement, the appellant cited the summary conviction appeal judge's failure to identify a historic rights-bearing community and the impediment that caused him in applying the remainder of the Powley test.   The Appellant also cited passages from the original Powley decision in support of a purposive interpretation of Métis constitutional rights that would recognize rights of mobile Métis on the prairies who may be dissimilar from the historic rights-bearing community originally recognized in the Powley decision.

The Crown argued that because Powley remains binding on the Alberta Court of Appeal the appeal was doomed to failure and encouraged the Court to deny leave and allow the Supreme Court to grant leave to appeal if it wished to revisit the test.

The Court refused to accept this suggestion and held that the potential contribution of an intermediate appellate court to resolving challenging legal questions should not simply be circumvented.  The Court held that applicant should have an opportunity to pursue his arguments about how to apply Powley, including the argument that, to achieve the promise of section 35, its test should be modified when applied to prairie Métis.  Accordingly, the Court granted leave to appeal on the following two questions of law:

  1. Did the summary conviction appeal judge err in law in failing to apply the Powley test in a purposive manner?
  2. Did the summary conviction appeal judge err in law in misapplying the Powley test?

* * * * * * * * * *

Ontario Superior Court Grants Injunction And Orders Project Proponent To Consult

By: Jaimie Lickers

Wahgoshig First Nation v. Her Majesty the Queen in Right of Ontario and Solid Gold Resources Corp. 2011 ONSC 7708


The Parties

The plaintiff, Wahgoshig First Nation ("Wahgoshig"), brought a motion for an interlocutory injunction restraining the defendant, Solid Gold Resources Corp. ("Solid Gold"), from engaging in mineral exploration in the area of Treaty 9.  Wahgoshig further sought an order requiring the Province of Ontario to provide an undertaking in damages to Solid Gold, or an order dispensing with the undertaking requirements under Rule 40.03 of the Ontario Rules of Civil Procedure.

The Facts

Certain facts were not in dispute.  Wahgoshig holds and exercises Aboriginal and treaty rights throughout its traditional territory on the lands in and around Lake Abitibi.  In November 2007, Solid Gold staked mining claims in the lands surrounding Lake Abitibi.  In July 2009, Ontario advised Solid Gold that it should contact Wahgoshig to engage in consultation regarding its intended mineral exploration.  Neither Ontario nor Solid Gold consulted with Wahgoshig prior to the commencement of Solid Gold's drilling operations in the spring of 2011.  Following the commencement of drilling operations, Wahgoshig contacted Solid Gold in an attempt to foster consultation.  On November 8, 2011, Ontario again advised Solid Gold that it must consult with Wahgoshig.  Solid Gold made no attempt to consult with Wahgoshig and continued its exploration activities.

On November 9, 2011, Wahgoshig served a Notice of Claim on Ontario pursuant to the Proceedings Against the Crown Act and initiated this motion for an interlocutory injunction. 

The Decision

Despite Solid Gold's preliminary objection to the jurisdiction of the Court to grant an interlocutory injunction, the Ontario Superior Court held that it had jurisdiction to grant the relief requested.  While Wahgoshig had not yet commenced an action, it had served a Notice of Claim and would serve a statement of claim on the expiration of the notice period.  This, the Court held, constituted an intended action and was within the contemplation of Rule 40.01 of the Rules of Civil Procedure.

After dispensing with the defendant's preliminary jurisdictional challenge, the Court went on to apply the tripartite test for granting injunctive relief outlined by the Supreme Court in RJR – MacDonald Inc. v. Canada.

On the issue of a serious question to be tried, the Court rejected Solid Gold's reliance on the Ontario Court of Appeal's ruling in Frontenac Ventures Corp. v Ardoch Algonquin First Nation, holding that in Frontenac the Court was not facing a constitutional challenge to the Mining Act.  The Court also recognized that, since the ruling in Frontenac, the Ontario government had amended its legislation to promote reconciliation between project proponents and First Nations.  The Court held that Wahgoshig's claim was not frivolous or vexatious and thus, the first branch of the RJR-MacDonald test was met.

The Court went on to reject Solid Gold's submission that the applicant failed to demonstrate proof of actual irreparable harm which could not be compensated by damages.  The Court found that certainty of irreparable harm is not always required and that such certainty may not be possible where the duties to consult and accommodate have not been met there is often a lack of knowledge about the impacts of a project.  Further, the Court recognized developments in the case law which have recognized that negative effects on Aboriginal and treaty rights and restrictions on the ability to exercise such rights in their preferred manner or location in itself constitutes irreparable harm.  The Court also reaffirmed existing jurisprudence which has held that the mere lost opportunity to be meaningfully consulted and to obtain accommodation for impacts constitutes irreparable harm which cannot be compensated by damages.  Accordingly, the second branch of the RJR- MacDonald test was met.

The Court also found the balance of convenience in this case to favour the applicant.  The Court agreed that refusing to enjoin Solid Gold from its activities would send a message that Aboriginal and treaty rights, including the right to be consulted and accommodated, could be ignored by exploration companies.  This, the Court held, would not be in the public interest.

In addition to granting injunctive relief in this case, the Court also noted that industry proponents can and have been held liable for their failure to consult.  The Court made a point of recognizing that Solid Gold not only failed to consult with Wahgoshig, but that the evidence indicated that it made a concerted, wilful effort not to consult. The Court also noted that Solid Gold failed to meet industry standards for responsible exploration with respect to First Nations engagement.

The Disposition

Solid Gold was enjoined from carrying on any further exploratory activity on the lands in question for 120 days from the date of the decision.  During the injunctive period, Solid Gold, Wahgoshig and Ontario were to enter into a process of bona fide, meaningful consultation and accommodation.  Should this process fail to be productive, Wahgoshig was entitled to seek an extension of the injunction.  The Court also dispensed with the requirement for an undertaking for damages as requested by the applicant.

* * * * * * * * * *

CRA Provides Position On The Tax Treatment of Interest Income Earned by Status Indians and Bands

By: Scott Robertson


Investment Income

In response to the Supreme Court of Canada decisions in the cases of Estate of Rolland Bastien v. Her Majesty the Queen and Alexandre Dubé v. Her Majesty the Queen the Canada Revenue Agency (CRA) has released a revision to its Information for Indians Bulletin which clarifies the exemption of taxation on interest income earned by status Indians and Bands.  According to the recent CRA bulletin, interest income will be tax exempt to status Indians or Bands, if the following conditions are met:

  1. Interest income is earned from a savings or chequing account, or from a term deposit or guaranteed investment certificate (GIC);
  2. The savings or chequing account, or term deposit or GIC, was opened or obtained at a financial institution (including a bank branch) located on a reserve;
  3. The financial institution is required to pay the interest income to the qualifying individual at a location of the financial institution on a reserve; and
  4. If the investment is a term deposit or GIC, then the interest rate is fixed or can be calculated at the time the investment is obtained.

The CRA bulletin indicates that it will apply the Supreme Court of Canada decisions in similar situations to exempt an Indian's interest income from tax for the 2011 and following tax years. 

The bulletin clarifies CRA's position on this issue, and makes it clear that CRA will apply the Bastien and Dube cases beyond the specific fact-patterns of those cases. 

In Bastien and Dube, the income at issue was from a term deposit, earned from an on-reserve credit union.  CRA is taking the position that the exemption will also apply in relation to similar types of income (account interest and GICs), and will not be limited to such investments made with on-reserve credit unions, but all financial institutions that are situated on a reserve, including an on-reserve branch of a chartered bank.

In addition to investment income, the bulletin identifies the circumstances in which dividend income, rental property income and royalty income will be treated as tax exempt when earned by status Indians or Bands. CRA's position is that the exemption applies when the principal income generating activities of a corporation, the rental property or the source of the royalty income are situated on a reserve.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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