Canada: Aboriginal Law Update: The SCC Rules That Ontario Can Take Up Land In Treaty 3 Territory Without Canada's Approval

It is "business as usual" in the Keewatin Territory in northwestern Ontario following the decision of the Supreme Court of Canada ("SCC") in Grassy Narrows First Nation v. Ontario (Natural Resources). Fifteen days after the SCC's landmark ruling in Tsilhqot'in Nation v. British Columbia, in which the SCC made a declaration of Aboriginal title over an area of land in British Columbia, the SCC released another landmark ruling on Aboriginal and constitutional law, this time in relation to Aboriginal treaty rights. 

On July 11, 2014, the SCC unanimously ruled that the Government of Ontario has the authority to "take up" land in the Keewatin Territory so as to limit First Nations' harvesting rights under Treaty 3 without requiring the approval of Canada. The SCC further held that provinces have the authority to infringe treaty harvesting rights if the infringement can be justified under s. 35 of the Constitution Act, 1982. The decision provides an important measure of certainty for those who do business in the Treaty 3 territory.    

Cassels Brock acted as counsel to Goldcorp Inc. in Grassy Narrows First Nation v. Ontario (Natural Resources) at the SCC and the Court of Appeal for Ontario. Goldcorp Inc. owns and operates significant mining assets in the Keewatin Territory.

Background

Under the terms of Treaty 3, the First Nation signatories agreed to surrender their title and rights to approximately 55,000 square miles of land (subject to lands reserved for their use), including the Keewatin Territory. The Keewatin Territory is situated in the Kenora District in northwestern Ontario.  It comprises approximately 40% of the land that is subject to Treaty 3.

Treaty 3 gave the First Nation signatories the right to hunt and fish (harvest) throughout the surrendered territory except on land that is "required or taken up for settlement, mining, lumbering or other purposes" by the "Government of the Dominion of Canada."

In 1873, at the time that Treaty 3 was entered into, Canada controlled the Keewatin Territory. Canada annexed the Keewatin Territory to Ontario in 1912. Ontario, as owner, has administered the Keewatin Territory since that annexation, and has taken up lands without the involvement or authorization of Canada by, for example, issuing land patents, establishing municipalities, recording mining claims and issuing mining leases and timber licenses.

The Litigation

In 1997, Ontario issued a sustainable forestry license to Abitibi-Consolidated Inc. ("Abitibi", a predecessor to Resolute FP Canada Inc.), which authorized Abitibi to carry out clear cut forestry operations in parts of the Keewatin Territory.

In 2000, Grassy Narrows First Nation ("Grassy Narrows"), one of the First Nation signatories to Treaty 3, commenced a legal proceeding to challenge that sustainable forestry license on the basis that it infringed their harvesting rights under Treaty 3. Grassy Narrows asserted that: (i) under the terms of Treaty 3, Ontario does not have the authority to take up lands in the Keewatin Territory without the authorization of Canada; and (ii) Ontario does not have the authority to infringe (violate) their Treaty 3 rights.

Decision of the Superior Court of Justice

In August 2011, following a 66-day trial, the Ontario Superior Court of Justice ruled in favour of Grassy Narrows. In particular, the Superior Court held that: (i) Ontario does not have the authority to take up land in the Keewatin Territory if the taking up would significantly interfere with Treaty 3 harvesting rights unless Canada first approved the taking up; and (ii) Ontario does not have the authority to infringe Treaty 3 harvesting rights even if the infringement can be justified under s. 35 of the Constitution Act, 1982.

The Superior Court decision placed into question the licenses, leases and other interests in land that Ontario has issued in relation to the Keewatin Territory since 1912, as the Superior Court decision rendered it uncertain if Ontario had the authority to issue them. The decision also had potential implications for lands that are subject to similar treaty provisions in several other provinces and the Northwest Territories.

Decision of the Court of Appeal for Ontario

In March 2013, the Court of Appeal for Ontario overturned the decision of the Superior Court. The Court of Appeal held that Ontario does have the authority to take up lands in the Keewatin Territory so as to limit the First Nations' harvesting rights, and that such taking up by Ontario does not require Canada's approval. The Court of Appeal declined to opine on whether Ontario has the authority to infringe Aboriginal treaty rights if the infringement can be justified under s. 35 of the Constitution Act, 1982.

Decision of the Supreme Court of Canada

On July 11, 2014, the SCC upheld the Court of Appeal's decision that Ontario has the authority to take up lands in the Keewatin Territory so as to limit the First Nations' harvesting rights without the approval of Canada.  Consistent with its recent decision in Tsilhqot'in Nation (released on June 26, 2014), the SCC also held that provinces have the authority to infringe Aboriginal treaty rights if the infringement can be justified under s. 35 of the Constitution Act, 1982.

Ontario has the Authority to Take Up Treaty 3 Land Without Canada's Approval

The SCC's conclusion that Ontario has the authority to take up Treaty 3 land without the approval of Canada is based on the Constitution Act, 1867, the language of Treaty 3 and the language of various federal and provincial statutes dealing with Treaty 3 lands.

Central to the SCC's decision is its conclusion that Treaty 3 is a treaty between the First Nation signatories and the Crown, not between the First Nation signatories and Canada. As Crown representatives, both Canada and Ontario are responsible for fulfilling the Treaty 3 promises within their respective spheres of jurisdiction as established by the Constitution Act, 1867.

Section 109 of the Constitution Act, 1867 gives Ontario beneficial ownership over the lands within its boundaries, and sections 92A and 92(5) give Ontario the authority to administer the lands within its boundaries by, for example, issuing mining and forestry licenses. Taken together, these sections give Ontario – and only Ontario – the authority to take up lands in the Keewatin Territory for settlement, mining, forestry and other provincial purposes.

The SCC further concluded that nothing in the language of Treaty 3 suggests that a two-step approval process involving both Ontario and Canada would be required for the taking up of land in the Keewatin Territory. The reference to the "Dominion of Canada" in Treaty 3 reflected the fact that Canada owned the lands when Treaty 3 was entered into. When Canada annexed the Keewatin Territory to Ontario, Ontario "stepped into the shoes" of Canada for the purpose of taking up land and fulfilling the Treaty 3 promises.

Ontario's Authority to Take Up Treaty 3 Land is Not Unconditional

The SCC confirmed its 2005 decision in Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage) that the Crown's authority to take up treaty lands is not unconditional.  Treaty harvesting rights must be respected. Accordingly, when taking up Treaty 3 lands:

  • Ontario has the duty to consult with the First Nations that may be affected by the taking up, and to accommodate their interests when appropriate, before proceeding with the taking up.
  • Ontario cannot take up so much Treaty 3 land that the First Nations' right to harvest in their traditional territories becomes meaningless. If the Crown takes up so much land that the right to harvest is rendered meaningless, then a potential action for treaty infringement may arise. 

Ontario has the Authority to Justifiably Infringe Treaty Rights

Consistent with its decision in Tsilhqot'in Nation, in which the SCC overturned prior case law in holding that provinces have the authority to justifiably infringe Aboriginal rights, the SCC ruled in Grassy Narrows First Nation that provinces have the authority to infringe treaty harvesting rights if the infringement can be justified under s. 35 of the Constitution Act, 1982.

In Tsilhqot'in Nation, the SCC confirmed the justification test established in its earlier decisions of R. v. Sparrow and R. v. Badger (the "Sparrow/Badger Test"). In order to justify an infringement under the Sparrow/Badger Test, the Crown must: (i) demonstrate a compelling and substantial governmental objective; and (ii) demonstrate that its actions are consistent with the fiduciary duty it owes to First Nations.

Proof that the Crown's actions are consistent with the fiduciary duties it owes to First Nations involves the consideration of a three-part test:

  • Rational Connection: the infringement must be necessary to achieve the Crown's objective;
  • Minimal Impairment: the Crown must go no further than necessary to achieve its objective; and
  • Proportionality of Impact: the benefits expected to flow from the objective must not be outweighed by the adverse effects on the Aboriginal interest.

Implications

The SCC's decisions in Grassy Narrows First Nation and Tsilhqot'in Nation establish the framework for how the Crown (federal or provincial) is to deal with Aboriginal title and harvesting rights under various scenarios:

  • In circumstances where the First Nations have surrendered title to their traditional territories under a treaty, and have retained the right to harvest over any surrendered land that has not been taken up by the Crown:
     
    • The Crown must consult, and where appropriate, accommodate First Nations' interests prior to any taking up of land.
    • Not every taking up of land will constitute an infringement of the treaty harvesting right. Provided the Crown does not take up so much land in the First Nation's traditional territory that the harvesting right is rendered meaningless, there is no infringement of the treaty harvesting right.
    • If the harvesting right has been infringed, the affected First Nations may have an action against the Crown for infringement. The Crown may seek to justify an infringement under s. 35 of the Constitution Act, 1982 in accordance with the Sparrow/Badger Test discussed above.
  • In circumstances where a claim for Aboriginal title has been established:
     
    • The First Nation title holder has the right to control the land, which includes the right to decide how the land will be used and the right to the economic benefit of the land.
    •  The Crown cannot take up Aboriginal title land, by for example, issuing mining or timber licenses or approving a gas pipeline, without the consent of the First Nation title holder unless the Crown can justify the taking up under s. 35 of the Constitution Act, 1982 in accordance with the Sparrow/Badger Test discussed above.
  • In circumstances where the land is the traditional territory of First Nations, title to the land has not been surrendered by a treaty with the Crown, and Aboriginal title has not been established, then the Crown must consult with any First Nation that may be affected by a taking up of land, and must accommodate their interests when appropriate.
     

While the level of control the First Nations can assert over their traditional lands is different under the various scenarios, the common theme that arises is the duty of the Crown (and by extension, project proponents) to consult with any First Nations whose interests may be affected by a proposed project or taking up of land.

By way of its decisions in Grassy Narrows First Nation and Tsilhqot'in Nation, the SCC has emphasized that the road ahead is through early, informed and effective consultation, negotiation and accommodation. The SCC has made it very clear that engaging in good faith consultations is not optional; it is mandatory. Governments who fail to comply with their duty to consult, and where appropriate, accommodate, are likely to have their decisions quashed (overturned) by the courts, with the projects cancelled or suspended pending completion of good faith consultations.

For our summary of the SCC's decision in Tsilhqot'in Nation v. British Columbia, click here.

The SCC's decision in Grassy Narrows First Nation v. Ontario (Natural Resources) can be found here. The SCC's decision in Tsilhqot'in Nation v. British Columbia can be found here.

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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