On July 26, 2024, the SCC released its decision in Ontario (Attorney General) v Restoule ("Restoule"). The Court unanimously found that Canada and Ontario breached their treaty obligations to the First Nation signatories of the Robinson Huron and Robinson Superior Treaties (the "Robinson Treaties") by failing to increase the annual payments provided for in the Robinson Treaties. The Court also made a declaration requiring Canada and Ontario to enter into negotiations with the Robinson Superior Nations.
The decision in Restoule provides commentary on the importance and scope of the concept of the honour of the Crown and clarifies the standard of review for the interpretation of historic treaties to be correctness rather than reasonableness. The case is also significant for its use of declaratory relief compelling the Crown to negotiate with a First Nation.
Restoule concerns the interpretation of the annuity augmentation clause (the "Augmentation Clause") of the Robinson Treaties, which provided that the Crown was to pay to the Nations a perpetual annual payment that would increase if the Crown received enough revenues from the ceded lands that the annuity payment could increase without the Crown incurring a loss. In 1850, the annuity payment was approximately $1.60-1.70 per person. The payment was increased to approximately $4.00 per person in 1875, but was never increased after that point.
Procedural History:
The Lake Superior Anishinaabe and Lake Huron Anishinaabe both brought claims against the Crown, which went to trial in three stages. The first stage addressed the interpretation of the Robinson Treaties, the second stage considered Ontario's defences of Crown immunity and limitations, and the third stage was to determine damages and the allocation of liability between Canada and Ontario.
The trial judge found in stage one that the Crown had a mandatory and reviewable obligation under the Augmentation Clause to increase the annuities promised in the Robinson Treaties when the economic circumstances allowed for it. The trial judge also found that the principle of the honour of the Crown required the Crown to diligently implement the Augmentation Clause. In stage two, the trial judge found that Crown immunity and provincial limitations legislation did not bar the Anishinaabe's claims.
Ontario appealed both the stage one and stage two judgments to the Court of Appeal for Ontario. In four sets of reasons, the Court of Appeal dismissed the appeal on the stage two judgment, but partially allowed Ontario's appeal of the stage one judgment. Ontario appealed to the SCC on the issue of the appropriate standard of review, the proper interpretation of the Augmentation Clause, the nature and content of the Crown's obligations under that Clause, the appropriate remedy for the Crown's breach, and the relevance of statutory limitations periods to the claims. The plaintiffs also cross-appealed on the question of the scope of the Crown's fiduciary duties.
The Principles of Interpretation for "Historic Aboriginal Treaties"
The SCC began its analysis by reviewing the principles for interpreting historic Aboriginal treaties. The Court reaffirmed the sui generis nature of treaties between First Nation and the Crown, which stems from the "Crown's assertion of sovereignty over Aboriginal societies". This sui generis nature of treaties means they are governed by special rules of interpretation, including the principle that the words in a historic treaty "must not be interpreted in their strict technical sense nor subjected to rigid modern rules of [interpretation]". Courts should attempt to choose from among the various possible interpretations of the common intention of the parties the interpretation which best reconciles the interest of both parties at the time the treaty was signed. Further, static or rigid interpretation, as well as technical or contractual interpretation of treaty wording should be avoided.
One of the unique aspects of treaty interpretation is the concept of the honour of the Crown. The SCC has held that, in order to promote reconciliation, treaties must be interpreted in accordance with the honour of the Crown, or "the principle that servants of the Crown must conduct themselves with honour when acting on behalf of the sovereign". This obligation leads to a requirement that the Crown have "honourable dealings" with Aboriginal peoples.
The Court also discussed the difference in the interpretative principles applied to historic versus modern treaties. Although all treaties between the Crown and Aboriginal peoples must be interpreted in accordance with the honour of the Crown, there are other interpretative principles that do not apply to modern treaties. This is because historic treaties were generally negotiated quickly and used brief and ambiguous language. In contrast, modern treaties are usually the "product of lengthy negotiations between well-resourced and sophisticated parties" which are negotiated over the course of years, with both sides being represented by legal counsel and other experts. As such, more deference by the courts to the text of modern treaties is warranted.
The Appropriate Standard of Review of the Interpretation of historic Treaties:
In considering the appropriate standard of review for historic treaty interpretation, the SCC considered the question of whether "the trial court's interpretation of a treaty right must be correct." In the Court's view, the answer to that question is yes. The Court held:
Findings of historical fact are particularly important in interpreting historic treaties and attract appellate deference absent palpable and overriding error or an extricable error of law. However, the constitutionally protected nature of treaty rights requires that appeal courts be given broad scope to intervene on issues of treaty interpretation. As a result, the standard of review for the interpretation of historic treaties is correctness.
The Court justified this holding for various reasons. First, it is in keeping with how the SCC has previously treated the interpretation of treaties in cases such as Marshall, Sundown, and Bear Island. Second, treaty rights are constitutionally protected by section 35(1) of the Constitution Act, 1982 and "are nation-to-nation agreements that engage the constitutional principle of the honour of the Crown". Third, treaty interpretation has "significant precedential value because it concerns enduring, multi-generational compacts."
Using this standard of review, the Court reviewed the language of the Augmentation Clause as well as the historical and cultural context surrounding the Robinson Treaties. It considered four possible interpretations of the Augmentation Clause, and concluded that there is a mandatory obligation to increase the annuity up to $4.00 per person, as was done in 1875. Beyond that, further increases are discretionary. However, if the economic conditions allow for the increase to be made without the Crown incurring a loss, the Crown is required to exercise its discretion and determine whether to increase the annuity and by how much. This discretion must be exercised diligently, honourably, liberally, and justly.
The Duty of Diligent Implementation
While the parties agreed before the SCC that the Crown has a duty to diligently implement the Augmentation Clause in a manner consistent with the honour of the Crown, there was disagreement as to whether that duty was procedural in nature, or whether it required the Crown to take positive and timely steps to fulfill the treaty promises.
The Court found that the duty was not merely procedural; it required the crown "to act in an honourable and timely way to pursue the purpose behind the treaty promise." Importantly, in this case, the Crown is required to pay an amount to compensate for its past breaches of both the Robinson Treaties and the duty of diligent implementation itself.
The SCC's use of Declaratory Relief
The SCC found that, while a full range of remedies (both declaratory and coercive) were available to the courts in this case, declaratory relief was the most appropriate remedy in this case. However, the Court also recognized that a declaration alone was insufficient given the "egregious and longstanding nature of the breaches at issue in these appeals."
Because the Augmentation Clause contains a promise that the Crown would exercise its discretion in increasing the annuity, the Court found the Crown must be given a chance within which to exercise its discretion, either through honourable negotiation or by a determination of the Crown as to the appropriate monetary remedy. The Court held that, "[u]ntil the Crown has exercised that discretion through honourable engagement with its treaty partners and has proposed an amount of compensation, it should generally not be judicially compelled to pay a certain sum of money to redress the harms occasioned by its neglect."
The Court directed the Crown to first engage "meaningfully and honourably" with the plaintiffs to attempt to reach an agreement on compensation for the Crown's breaches. However, if no agreement could be reached within six months, the Court declared that the Crown is obliged to "determine an amount of honourable compensation to the Superior plaintiffs for amounts owed under the annuities for the period between 1875 and the present." This exercise of the Crown's discretion in determining the amount of compensation, both in terms of process and the amount, is reviewable by the courts.
Restoule marks an important decision from the SCC in the area of Aboriginal law. It reaffirms the Court's past decisions on the principles of treaty interpretation, clarifies the standard of review for the interpretation of historical treaties, provides guidance on the scope of the duty of diligent implementation, and makes novel use of a declaratory remedy to compel the Crown to negotiate honourably.
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