On July 11, 2014, the Supreme Court of Canada (“SCC”), in a unanimous decision, dismissed the appeals of the Grassy Narrows First Nation (“Grassy Narrows”) and Wabauskang First Nation, and confirmed that Ontario has constitutional authority to take up Treaty 3 lands for development without Canada’s involvement. The dispute initially arose in 1997, when Ontario issued a licence to carry out clear-cut logging on Treaty 3 lands. In 2005, Grassy Narrows launched an action to set aside the licence because it violated their Treaty 3 harvesting rights. Further, Grassy Narrows argued that Ontario could not take up lands without first involving Canada, because the Treaty was with the Crown (Canada), not the Province.
In the first part of the litigation, at issue was whether Ontario, under Treaty 3, can “take up” lands in the Keewatin area so as to limit the First Nations’ harvesting rights, or whether it needs federal authorization to do so.
The SCC ruled that Ontario had the authority to take up the lands. Canada did not need to be involved. In taking up the lands, Ontario must consult and, if appropriate, accommodate the First Nations, in a manner consistent with the honour of the Crown. Ontario must justify the taking up if it will leave First Nations with no meaningful Treaty rights.
The appellants Grassy Narrows are descendants of Ojibway Treaty 3 signatories and have traditional territory in the Keewatin area of Northwestern Ontario.
In 1873, the Ojibway entered into Treaty 3 with Canada covering lands that include vast areas of present-day Northwestern Ontario. The SCC’s characterization of the Treaty is that the First Nations ceded the territory in exchange for reserves, annuities, and goods and the right to harvest on the non-reserve lands within the Treaty area until the land was “taken up.” The taking up clause in the Treaty reads:
. . . they, the said Indians, shall have [the] right to pursue their avocations of hunting and fishing throughout the [said] tract surrendered as hereinbefore described . . . and saving and excepting such tracts as may, from time to time, be required or taken up for settlement, mining, lumbering or other purposes by Her said Government of the Dominion of Canada, or by any of the subjects thereof duly authorized therefor by the said Government.
At the time of the negotiation and signing of Treaty 3, there was an ongoing dispute between Ontario and Canada about Ontario’s western boundary and whether the Treaty 3 lands were within that boundary. However, the Keewatin area was unquestionably under the control of Canada.
In 1884, the Judicial Committee of the Privy Council ruled on the location of the Ontario boundary and, in 1891, both Canada and Ontario enacted legislation acknowledging the boundary. The 1891 legislation contained a draft agreement between Canada and Ontario that was executed in 1894 and stated that Ontario would be responsible for the “taking up” of Treaty 3 lands within its provincial boundaries. In 1912, Ontario’s boundary was extended to include the Keewatin lands.
THE SCC’S REASONS
At trial, Grassy Narrows argued that Treaty 3 was made with Canada, and thus only Canada, not the Province, had obligations and powers under the Treaty. They argued that if the Province wanted to take up Treaty 3 lands, a two-step process involving Canada had to be followed. In lengthy Reasons, the trial judge reviewed all of the evidence, including the oral history regarding the Treaty. The trial judge accepted the First Nation’s understanding of the Treaty and agreed that Canada had a role in the taking up of lands.
The SCC rejected this position stating that while Canada signed the Treaty, the Treaty was an agreement with the “Crown,” which encompasses both federal and provincial governments. Each level of government (federal and provincial) has obligations and powers under the Treaty when it acts within its constitutional jurisdiction.
The SCC determined that given s. 109 (giving Ontario the beneficial interest in lands and resources in the Province), s. 92A (giving Ontario the power to makes laws regarding non-renewable natural resources, forestry resources, and electrical energy), and s. 92(25) (giving Ontario the power of the management and sale of provincial lands and the timber and wood thereon) of the Constitution Act, 1867, Ontario has the exclusive jurisdiction to grant forestry licences within its provincial borders. Ontario can exercise this jurisdiction to take up Treaty lands, but in doing so, it assumes the powers and obligations conferred on the Crown by the Treaty.
The First Nations had also argued that Canada’s jurisdiction under s. 91(24) of the Constitution Act, 1867 for “Indians, and Lands reserved for the Indians” left Canada with a residual role in the taking up of Treaty lands. The SCC disagreed stating that s. 91(24) did not impose a requirement on Ontario to obtain federal approval before taking up lands under Treaty 3.
Moreover, the SCC determined that the history of the negotiations, the text of Treaty 3, and the subsequent 1912 legislation, all confirm that there was no intention to employ a two-step process (involving both the provincial and federal governments) for the taking up of Treaty lands. The references in the Treaty to “the Dominion of Canada” merely reflect the fact that the lands were in Canada, not Ontario, at the time the Treaty was signed. The 1912 agreement between Canada and Ontario also confirmed that the taking up of lands under the Treaty was not meant to require a two-step process; the agreement permitted Ontario alone to take up lands under the Treaty.
The SCC cautioned that in exercising its powers, Ontario is bound by the honour of the Crown and fiduciary duties relating to Aboriginal interests under s. 35 of the Constitution Act, 1982. In taking up lands, the Province must first (in accordance with Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage), 2005 SCC 69) consult with and, if appropriate, accommodate the First Nation with respect to its Treaty rights. The duty to consult requires that the Province inform itself of the impact of a project on the First Nation’s Treaty rights, communicate these impacts to the First Nation, and deal with the First Nation in good faith “with the intention of substantially addressing their concerns.” The Province cannot exclude accommodation at the outset.
The SCC also stated that if the taking up infringes Treaty rights, the Province will have to justify the infringement in accordance with the test set out in R. v. Sparrow,  1 S.C.R. 1075; and R. v. Badger,  1 S.C.R. 771. The SCC did not offer guidance on what constitutes an infringement other than stating that an infringement occurs when a First Nation is left without a meaningful right to harvest on the lands.
Lastly, relying on the recent decision in Tsilhqot’in Nation v. British Columbia, 2014 SCC 44 (“Tsilhqot’in”), the SCC stated that the doctrine of inter-jurisdictional immunity, which protects federal and provincial governments from interference by the other level of government within their core areas of exclusive jurisdiction, does not preclude the Province from infringing treaty rights.
The SCC’s decision removes much of Canada’s oversight or protective responsibilities for Treaty 3 rights. Instead, Treaty 3 obligations will be imposed on whichever Crown, federal or provincial, has constitutional jurisdiction (s. 91 or s. 92) over the action at issue. For example, the provincial Crown will be responsible under the Treaty when issuing licences for forestry (s. 92), and the federal Crown will be responsible under the Treaty when issuing Fisheries Act permits (s. 91). In each case, the responsible Crown will have to consult with and accommodate First Nations if its actions could affect Treaty rights.
If the actions of the Crown amount to an infringement of Treaty rights, the Crown will be required to justify the infringement, which requires it to act in a manner consistent with the fiduciary relationship between the Crown and the Treaty rights holders. The exercise of Treaty rights must remain meaningful. As the Court confirmed in its recent decision in Tsilhqot’in, the constitutional requirement to justify infringements imposes a heavy burden on the Crown.
While the SCC provided clarity on the obligations and responsibilities of the federal and provincial governments with respect to Treaty 3, many aspects of the Treaty relationship remain to be reconciled either through good faith negotiations or through further litigation.
This case summary provides our general comments on the case discussed and should not be relied on as legal advice. If you have any questions about this case or any similar issue, please contact one of our lawyers.