Canada: Tribunal Holds That Crown Breached Lawful Obligation By Withholding Treaty Annuities

Last Updated: May 15 2015
Article by Maxime Faille, Jeremy Bouchard and Paul Seaman

Most Read Contributor in Canada, October 2018

On May 6, 2015 the Specific Claims Tribunal ("Tribunal") released its decision regarding a specific claim filed by Beardy's and Okemasis First Nation (the "First Nation"). At issue was the alleged non-payment of annuities payable under the terms of Treaty 6 during the years 1885 to 1888. (Under the terms of Treaty 6, and in common with many historical treaties, the Crown agreed to pay each member of the band $5 per year. These are referred to as "annuities."). It was not contested that during those years, the Crown had withheld annuities for the reason that members of the First Nation (and other First Nations) were alleged to have participated in the North-West Rebellion of 1885, led by Métis leader Louis Riel.

The Crown claimed that it had no obligation to compensate on several grounds. First, Canada argued that the issue was not within the Tribunal's jurisdiction because annuities are not "tangible property" within the meaning of the Specific Claims Tribunal Act SC 2008, c 22 (the "Act"). Canada also argued that in any event the payments were owed to individual members of the First Nation and not the First Nation itself. Accordingly, Canada argued, the non-payment of annuities was not a "loss" that could be claimed by the First Nation before the Tribunal. Finally, Canada argued that the decision to suspend the payment of annuities was justified, because of the alleged participation of members of the First Nation in the North-West Rebellion. Such participation, Canada argued, constituted a breach of the First Nation's duty under the treaty to remain loyal to the Crown. The Tribunal rejected each of these arguments.

Background and Procedural History

The First Nation filed the claim with Canada in 2001, only to be notified seven years later that the claim had been rejected as falling outside of the Specific Claims Policy. The First Nation therefore re-filed the claim with the Tribunal in 2011 (under the Act, a First Nation may file an eligible claim either after three years of it being filed with Canada, or at any time after the claim is rejected by Canada).

The Crown brought an application to strike the claim on the basis that the Tribunal did not have the jurisdiction to hear and decide the case. In this regard, the Crown raised two arguments: (i)  that treaty annuities did not constitute "tangible property" as defined under the Act, and (ii) that because treaty annuities are payable to individuals, non-payment of the annuities did not constitute a loss to the First Nation per se

In the event the Tribunal were to find that it had jurisdiction to hear the claim, the Crown also sought to defeat the claim on the grounds that members of the First Nation had in fact participated in the North-West Rebellion, and that such action amounted to disloyalty to the Crown which, in turn, justified the withholding of the annuities.     

Decision and Reasoning of the Tribunal

In assessing whether the annuities constituted "tangible property" as defined under the Act, the Tribunal reviewed the applicable principles of treaty interpretation. The Tribunal determined that when viewed from the perspective of the signatories to Treaty 6, the Chiefs and Headman who negotiated and signed Treaty 6 would have understood that the promise to pay "cash, like a cow or plow, is an asset." In the Tribunal's view, this reasoning and understanding extended "to both parties to Treaty 6." The Tribunal additionally found that this interpretation was also consistent with the principle that requires avoidance of a technical or contractual interpretation of treaties, and existing case law on the proper characterization of currency as tangible property.  In applying these principles to the facts, the Tribunal considered that the annuities at issue were "tangible property" for the purposes of conferring jurisdiction to hear the claim. 

With respect to the Crown's argument that the alleged loss of annuities was more properly regarded as a loss to various First Nation individuals rather than a collective loss to the First Nation per se, the Tribunal regarded the annuities promise as "a promise to the collective comprised of the members, collectively, as it is constituted at every moment in time" and in partial consideration for the cession of Aboriginal title held by that collective. A band, the Tribunal noted, does not have an independent legal personality; rather, it is comprised of its members, and is in law a collective of its members. Acknowledging that annuities likely have both a collective and individual aspect to them, the Tribunal emphasized that the "mechanics of payment does not alter the nature of the right" and concluded that the First Nation did suffer a collective loss by the withholding of annuities, and therefore the Tribunal did have jurisdiction to hear the claim.   

The Crown also sought to rely upon an internal and unpublished policy used by the Specific Claims Branch. The policy stated that annuity claims would not be considered under the Specific Claims Policy. The Tribunal also rejected this argument, holding instead that the Internal Policy was irrelevant to the exercise of interpreting the Act.

Finally, the Tribunal made several significant factual conclusions in relation to the Crown's argument that the First Nation had failed to honour its treaty obligations and that this justified the withholding of annuities. The Tribunal found as fact that Chiefs Beardy and Okemasis were not disloyal in relation to the North-West Rebellion, nor were the members of their First Nation involved in the conflict in any significant or organized fashion. Rather, the Tribunal highlighted evidence that the minimal involvement of any members of the First Nation in the conflict was subsequently deliberately overblown by the Crown in order to justify the implementation of several policy measures designed to "control and subjugate" Aboriginal people as the Crown proceeded to settle the west. One example cited by the Tribunal is the "pass system," which barred members of the First Nation from leaving their reserve without government permission for many years.

In the end, the Tribunal concluded that there was "no honourable ground on which the Crown could exercise a legal power to withhold treaty payments even if it possessed the power." Accordingly, the Tribunal held that the Crown had breached a lawful obligation owed to the First Nation in relation to the unpaid annuities.       

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