Legal and Fiduciary Duties Owed to First Nations in Relation to On-reserve Drinking Water and Housing — Case Summary

Overview

On December 5, 2025, the Federal Court released two important decisions: St. Theresa Point First Nation v Canada (Attorney General), 2025 FC 1926 (“St. Theresa Point”)¹ and Shamattawa First Nation v. Canada (Attorney General), 2025 FC 1927 (“Shamattawa”).² Shamattawa and St. Theresa Point are both class actions in the first stage of a two stage proceeding certified by the Court.

In St. Theresa Point, the Court found that Canada owes fiduciary duties and a common law duty of care in relation to on-reserve housing. In Shamattawa, the Court made similar findings in relation to on-reserve drinking water. The Court also found in both cases that sections 17, 7, and 2 of the Canadian Charter of Rights and Freedoms (the “Charter”) are engaged.

Background of the Cases

In St. Theresa Point, the St. Theresa Point First Nation and the Sandy Lake First Nation brought a class action against Canada for failing to address the housing crisis in reserve communities.³ The Class is comprised of remote First Nations and their members. Class Members’ housing is overcrowded and dilapidated and the Plaintiffs claim that this has caused significant damages to Class Members’ health, safety, and ability to practice and share their culture and spirituality.⁴

In Shamattawa, the Shamattawa First Nation brought a class action against Canada for failing to provide access to safe drinking water on-reserve. The Class in Shamattawa is comprised of First Nations whose reserves have been subject to a drinking water advisory lasting at least one year and that commenced or continued after June 20, 2021, and the members of such First Nations who ordinarily resided on the reserves.⁵ The Shamattawa First Nation is a Treaty 5 First Nation located in a remote fly-in community in northern Manitoba. They have been under a near constant Drinking Water Advisory since December 2018. Canada has been responsible for providing water and water infrastructure development to the Shamattawa First Nation since they were relocated by Canada in 1908.⁶

Legal Analysis

In these two decisions, the Federal Court acknowledges the historical and continuing impacts of colonization, and in particular: (a) those arising from the creation of reserves that comprise a small fraction of Indigenous peoples’ original territories, and (b) the imposition of the Indian Act and government policies which transformed formerly self-sufficient peoples into dependant, vulnerable and impoverished communities. While Canada sought to place responsibility for providing adequate housing and safe water on First Nations, the Court found that this position ignores the roots of the current crises.

Sui Generis Fiduciary Duty

The Court in St. Theresa Point and Shamattawa held that Canada owes a sui generis fiduciary duty to First Nations in relation to on-reserve housing and on-reserve access to safe drinking water.

The Crown’s sui generis fiduciary duties flow from the Honour of the Crown and protect Indigenous peoples’ interests in recognition of the “degree of economic, social and proprietary control and discretion asserted by the Crown,” leaving Indigenous peoples “vulnerable to the risks of government misconduct or ineptitude.”⁷

A sui generis fiduciary duty arises when there is:

a specific or cognizable Aboriginal interest; and
a Crown undertaking of discretionary control over that interest.⁸

Cognizable Aboriginal Interest in Land

The Supreme Court of Canada has previously held that the communal interest in land is a cognizable Aboriginal interest.⁹ A specific cognizable Aboriginal interest is distinctly Aboriginal, collective in character, and integral to the nature of the Aboriginal distinctive community.¹⁰

The Court found that without adequate housing and water, reserves cannot be used for their intended purpose; the already recognized cognizable interest in reserve lands therefore includes an interest in accessing housing and water on reserve.¹¹ The Court rejected Canada’s arguments that its role in housing and water on reserves is only to provide funding, loans and assistance in attracting capital investment, and that First Nations can seek funding from other sources.

The Court in St. Theresa Point found that land and housing are inextricably linked because access to adequate housing is naturally part of the use and occupation of the collective interest in reserve lands which Canada has administrative control over pursuant to the Indian Act. Justice Favel rejected Canada’s argument that the right to housing must be pre-existing as that “would foreclose many types of uses and occupations of land and would freeze the definition of the term in time.”¹²

The Court in Shamattawa applied the same legal reasoning provided in St. Theresa Point to find that drinking water on reserve, like the reserve land itself, is a cognizable Aboriginal interest.¹³ Drinking water is tied to the prior use and occupation of Indigenous peoples’ territories and access to it made reserve settlement possible.¹⁴

Crown Undertaking of Discretionary Control

In respect to the Crown’s undertaking of discretionary control, the Court in St. Theresa Point found that “Canada has historically exercised power, authority and control over all facets of First Nations’ life – including housing,” which has created a dependency that persists to the present.¹⁵

The Court in St. Theresa Point found that direct administration or control over housing is not required, particularly where the Crown is involved. Rather, the exercise of discretionary control may be established by evidence demonstrating the scope of the exercise of discretion and vulnerability.¹⁶ Canada’s discretionary control over on-reserve housing is exercised through “[t]he complex web, the requirements to submit funding proposals and adhere to any conditions of funding along with waiting for the bureaucracy to determine what amount and when the funding will flow.”¹⁷

The Court also noted that “the Indian Act in conjunction with its predecessor legislation has controlled every aspect of lives of First Nations on reserves since its inception” and that many reserves are isolated and lack a viable economic base.¹⁸ The Court in St. Theresa Point noted that Canada’s submissions ignored the legacy and harmful impacts of its colonial policies.¹⁹

The Court in Shamattawa applied the same legal reasoning to find a sui generis fiduciary duty in relation to on-reserve access to safe drinking water, due to the vulnerability of on-reserve First Nations and the discretionary control Canada exercises over access to safe drinking water.²⁰ The fact that some control is shared does not negate the existence of a fiduciary duty.²¹

Ad Hoc Fiduciary Duty

The Court in St. Theresa Point and Shamattawa also found that Canada owes an ad hoc fiduciary duty to First Nations in relation to on-reserve housing and on-reserve access to safe drinking water.

Ad hoc fiduciary duties “arise if the government has undertaken to exercise its discretionary control over a legal or substantial practical interest in the best interests of the First Nation.” Ad hoc duties require utmost loyalty to the beneficiary.²² An ad hoc fiduciary duty will be found where:

the fiduciary makes an express or implied undertaking to act in the best interests of the beneficiary;
the beneficiary, which can be a person or a class of persons, is vulnerable to the fiduciary’s control; and
a legal or substantial practical interest of the beneficiary can be adversely affected by the fiduciary’s exercise of discretion or control.²³

The Court in St. Theresa Point found an ad hoc fiduciary duty “based on the colonial legacy and current control that Canada has over housing policy and funding.²⁴ In particular:

The Indian Act, and Canada’s programs and policies, establish an express and implied undertaking by Canada to act in the best interests of First Nations. The Court held that “[t]o find otherwise ignores the legacy of colonization.”²⁵
First Nations and status Indians resident on reserve have remained vulnerable to Canada’s control over housing policy and access to funding. The vulnerability and dependence on Canada of First Nations was exacerbated by locating reserves in remote areas with limited opportunities for economic development.²⁶
The practical interest in housing on reserve has been affected by the significant exercise of discretion and control by Canada through a complex web of funding processes and the lack of an economic base for creating their own source revenue to provide livable and safe housing.²⁷

The Court in Shamattawa applied the same legal reasoning provided in St. Theresa Point to find that the Plaintiffs have established the existence of an ad hoc fiduciary duty in relation to access to safe drinking water.²⁸

Common Law Duty of Care

The Court in St. Theresa Point and Shamattawa found that Canada owes a common law duty of care. This means that Canada has an obligation to exercise the standard of care expected of a reasonable and prudent person in the same circumstances, and take precautions against reasonably foreseeable risks.

The well-established legal test to determine whether a duty of care exists is:

Is there a relationship of proximity in which a failure to take reasonable care might cause loss or harm; and
Are there any residual policy reasons outside the parties’ relationship that should negate the duty of care?²⁹

In respect to the first part of the test, the Court in St. Theresa Point found that the historical relationship between Canada and First Nations, including the Indian Act and Canada’s establishment of reserves and development of policies, and the significant degree of control that Canada continues to have over First Nations, created a relationship of proximity and vulnerability. It was reasonably foreseeable that Canada’s failure to exercise reasonable care in relation to the provision of funding for housing could cause loss or harm to the Class.³⁰

Justice Favel in St. Theresa Point noted that Canada has directly entered the field in relation to on-reserve housing, finding that “the constellation of laws, policies and funding agreements have created so much control that there are next to no options for housing development for the Class.” Justice Favel found that the Class Members’ isolation from commercial centres and the lack of benefits they receive from industries operating in their traditional territories leaves them without alternative sources of funding to address the on-reserve housing crisis, and that this is a result of the impacts of colonialism.³¹ Justice Favel concluded that the duty of care is informed by the Honour of the Crown.³²

The Court in Shamattawa applied the same legal reasoning provided in St. Theresa Point to find that the Plaintiffs have established the existence of a common law duty of care in relation to on-reserve drinking water.³³

Charter Rights

The plaintiffs in both St. Theresa Point and Shamattawa advanced similar Charter claims against Canada under sections 15, 7 and 2. Section 15 of the Charter deals with equality rights, section 7 deals with the right to life, liberty and security of person, and sections 2(a) and 2(c) deal with the right to freedom of religion and assembly.

The Court concluded that sections 15, 7 and 2(a) of the Charter were engaged because s. 32(1) of the Charter provides that the Charter applies to the legislative, executive and administrative branches of the government. The Court left for the next stage of the proceedings the determination of what specific Charter obligations are owed.

Key Takeaways

Canada has legal duties and/or obligations to take reasonable measures to provide First Nations access to adequate and safe housing and drinking water on their reserves. These include fiduciary duties and a common law duty of care.
Sections 2, 7 and 15 of the Charter are engaged, though the specific obligations of Canada remain to be determined.
The Court rejected Canada’s arguments that sought to places sole responsibility on First Nations to provide their members with adequate and safe housing and water, recognizing the legacy of enduring impacts of colonialism and control over First Nations and their lands.
Whether Canada has breached any of its duties or obligations will be determined in a future stage of the litigation.

Footnotes

¹ St. Theresa Point First Nation v Canada (Attorney General), 2025 FC 1926 [St. Theresa Point].

² Shamattawa First Nation v. Canada (Attorney General)], 2025 FC 1927 [Shamattawa].

³ St. Theresa Point at para. 6.

⁴ St. Theresa Point at para. 3.

⁵ Shamattawa at para. 1.

⁶ Shamattawa at para. 24.

⁷ St. Theresa Point at para. 130, citing Wewaykum Indian Band v Canada, 2002 SCC 79 at para. 80 [Wewaykum].

⁸ St. Theresa Point at para. 131, citing Williams Lake Indian Band v Canada (Aboriginal Affairs and Northern Development), 2018 SCC 4 at para 44; Manitoba Métis Federation Inc v Canada (Attorney General), 2013 SCC 14 at paras 49-51; Wewaykum at paras 79-83.

⁹ St. Theresa Point at para. 132.

¹⁰ St. Theresa Point at para. 132.

¹¹ St. Theresa Point at para. 159; Shamattawa at paras. 167-169

¹² St. Theresa Point at paras. 160, 163.

¹³ Shamattawa at para. 166.

¹⁴ Shamattawa at para. 177.

¹⁵ St. Theresa Point at para. 166.

¹⁶ St. Theresa Point at para. 174.

¹⁷ St. Theresa Point at para. 171.

¹⁸ St. Theresa Point at para. 172.

¹⁹ St. Theresa Point at para. 170.

²⁰ Shamattawa at para. 177.