On January 17, 2013, the Supreme Court of Canada denied the
Blood Tribe's application for leave to appeal the Alberta Court
of Appeal's decision in Blood Tribe v. Canada (Attorney
General),2012 ABCA 206. The underlying claim centred on
the Crown's duties regarding the Tribe's attempt to obtain
an exemption from the Excise Tax Act for the production of
fuel from an oil refinery – one with underlying property that
the Tribe planned to purchase and then convert to reserve land.
In 1998, the Blood Tribe entered into a non-binding letter of
intent to purchase an oil refinery. The Tribe planned to convert
the property containing the refinery into reserve land, in the hope
that the production from the refinery would be exempt from excise
tax by virtue of section 87 of the Indian Act. Section 87
exempts "the personal property of an Indian or band situated
on a reserve" from taxation, as well as providing that
"no Indian or band is subject to taxation in respect of the
ownership, occupation, possession or use" of the property. One
of the conditions of the letter of intent was confirmation from
Revenue Canada that the refinery production would be exempt from
During the process to approve in principle the addition of the
refinery property to reserve land, the Blood Tribe sought a
remission order exempting it from any future tax should the
purchase of the refinery and conversion to reserve lands be
realized. The Blood Tribe sought this order to gain standing in
Court to challenge Canada on the excise tax issue. The Department
of Finance refused to grant the remission order on the basis that
tax remission orders should not be used simply to give standing in
court on tax issues.
In 2005, the Blood Tribe filed a Statement of Claim against the
Crown for damages of $150,000,000, alleging breach of fiduciary
duty and unjust enrichment. The Tribe also sought a declaration
that the production of fuels at the oil refinery on reserve lands
would be exempt from excise tax.
The Crown applied for summary dismissal of the claim on the
grounds that the Blood Tribe's claim was bound to fail. While
the lower court judge dismissed the Crown's application, the
Alberta Court of Appeal overturned the lower court decision and
dismissed the Blood Tribe's action.
In doing so, the Court expressly noted, relying on the Supreme
Court of Canada's decision in Wewaykum Indian Band v.
Canada, 2002 SCC 79, that not all obligations of the
federal Crown in its dealings with Aboriginal peoples are of a
fiduciary nature, nor do fiduciary duties exist at large. Further,
even if the Crown did have a duty to assist in the creation of the
commercial venture, the Court determined that it was not obliged to
agree with the Tribe's interpretation that section 87 of the
Indian Act entitled it to an exemption since the
performance of public law duties, such as interpreting the
Excise Tax Act, require the Crown to consider its duties
and obligations to other parties when determining the scope of its
duty to Aboriginal groups.
The Court of Appeal also dismissed the Blood Tribe's request
for a declaration that the refinery would be exempt from excise tax
as the proposed commercial venture was based on hypothetical facts
that may never occur.
A decision of the Supreme Court of Canada denying leave does not
mean that the Court agrees with the decision from which leave was
applied for. However, the denial of leave means that on the issues
decided in the Court of Appeal decision, the decision is binding in
Alberta and persuasive throughout the country. Regardless, under
the Court of Appeal's decision, the federal Crown does not owe
a fiduciary duty to a First Nation to assist with a commercial
venture in the absence of an express commitment to do so.
It remains to be seen if the federal Crown owes any lower form
of obligation to First Nations in the pursuit of commercial
ventures on reserve. Given the interest of many First Nations in
establishing business ventures on reserve, together with the
federal Crown's involvement in decisions involving reserve
lands, it would appear that this issue could find itself before the
courts again in a different form.
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