On January 18, 2023, Chairperson Chiappetta of the Specific Claims Tribunal (Tribunal) issued a decision finding that Canada had not breached its fiduciary duties to Saulteaux First Nation. The claim was brought with respect to the 1960 surrender for sale of two parcels of Saulteaux First Nation’s Reserve No. 159, which bordered on Jackfish Lake. The Tribunal found that the terms of the surrender were neither foolish nor improvident when viewed from Saulteaux’s perspective at the time, and that Canada had not engaged in conduct which would have tainted the dealings. The Tribunal further found that the duty of minimal impairment only arises in the context of an expropriation, not a surrender.
Photo credit: Doane Gregory
Facts about this Specific Claim
Saulteaux First Nation (Saulteaux or the Claimant) is located in northwestern Saskatchewan. Between 1905 and 1909, approximately 9,010 acres of land were set aside for Saulteaux’s use and benefit along the shores of Jackfish Lake and Murray Lake as Indian Reserve No. 159 (the Reserve).
The Province of Saskatchewan (Saskatchewan or the Province) first approached the Department of Indian Affairs (DIA) about a surrender of the Reserve in 1947. Saskatchewan was interested in establishing a public park along the lakefront of Jackfish Lake, but Saulteaux did not consent to surrender the Reserve at that time. In March 1958, Saskatchewan approached the DIA to again request land from the Reserve for a park. Saulteaux refused to surrender any portion of the Reserve.
In September 1959, the Province re-initiated negotiations with Saulteaux. In October 1959, the council of Saulteaux passed a Band Council Resolution (BCR) outlining the conditions on which it would be willing to surrender portions of the Reserve fronting on Jackfish Lake. The Province agreed.
In November 1959, the council of Saulteaux passed a BCR agreeing to surrender 207 acres of the Reserve which fronted on Jackfish Lake in exchange for a 4,970-acre tract of provincial Crown lands about 65 kilometers away on the shores of Birch and Helene Lakes (the Exchange Lands); a cash payment of $20,000; and mineral rights on a 640-acre section of the Exchange Lands. The evidence indicated that while the fishing and recreational potential on the Exchange Lands was not as good as Jackfish Lake, wild game and fur bearing animals were “plentiful,” and the Exchange Lands were better for stock raising. Saulteaux also retained the portions of the Reserve providing access to Murray Lake, which had good fishing.
Around this time, the council of Saulteaux considered and abandoned a proposal to lease an 83-acre portion of the Reserve fronting on Jackfish Lake for resort purposes in favour of the land exchange proposal. In December 1959, in light of Saulteaux’s decision to pursue the land exchange, Canada chose not to send to Saulteaux a draft surrender for lease.
In January 1960, a majority of Saulteaux members voted to surrender the 207 acres of Reserve lands fronting on Jackfish Lake and proceed with the land exchange.
Photo credit: Doane Gregory
The Specific Claims Tribunal’s Decision
The Claimant argued that the surrender and land exchange constituted an exploitative bargain, and that Canada had breached its fiduciary obligations by consenting to it. The Tribunal disagreed.
When is a bargain exploitative?
The Tribunal noted that the Crown’s fiduciary obligations in the context of a surrender of reserve lands arise from the Royal Proclamation of 1763. In the Royal Proclamation, the Crown took upon itself the role of intermediary between Indigenous Peoples and incoming settlers with respect to land transactions. In other words, the Crown took on a responsibility to prevent exploitative bargains.
The Tribunal observed that a bargain concerning surrendered reserve lands is exploitative when an outsider’s efforts to obtain the surrender are based on fraud or abuse, or if the First Nation’s decision to surrender their interest in reserve land was “foolish or improvident”, which generally means that the First Nation was not given sufficient information to protect their own best interest. The question of whether a decision to surrender was foolish or improvident must be “‘viewed from the perspective of the Band at the time’ which leaves no room for hindsight.”1
The Tribunal considered evidence from three land appraisers who undertook to value the Jackfish Lake parcels and the exchange lands at the time of the surrender. Two experts used the “direct comparison approach”, which compares similar parcels that have recently been sold, are listed for sale, or are under contract. The third expert used the “subdivision development approach”, which estimates the value of a parcel of land by analyzing potential costs and potential revenues of the hypothetical subdivision and sale of the parcel. The Tribunal found that the Jackfish Lake lands were not ripe for subdivision in 1960, as there was no applicable subdivision or development agreement. Since the Tribunal considered that there is no role for hindsight when analyzing a freely taken decision to surrender reserve lands, the Tribunal preferred the direct comparison approach in this case.
The Tribunal held that, at the time the Claimant decided to surrender portions of the Reserve in 1960, the bargain was a fair and reasonable one from their perspective. The Tribunal found that the terms of the bargain struck in 1960 adequately compensated the Claimant for the deficiencies of the Exchange Lands when compared to the Jackfish Lake parcels, and addressed the Claimant’s expressed concerns with the Province’s earlier proposals. While the Jackfish Lake parcels were known to have greater potential for development than the Exchange Lands, this potential was not yet “ripe” for development and the Tribunal did not factor it in when comparing the value of the Jackfish Lake parcels to the value of the Exchange Lands at the time of the surrender.
Adequate Understanding of the Terms of Surrender
The Tribunal found persuasive the fact that Saulteaux had considered and rejected two previous proposals from the Province because the proposals did not meet their requirements. The Tribunal also referred to the fact that an English-Cree interpreter was present for the 1960 surrender meeting and that, of the 60 members of the band who voted on the proposal, 52 were in favour of the surrender. For these reasons, the Tribunal was satisfied that the Claimant’s understanding of the terms of the surrender had been adequate.
Canada’s Conduct
The Tribunal indicated that if the Crown has acted in a way that tainted the proceeding and made it unsafe to rely on the First Nation’s expressed intention or understanding, then a bargain arising out of that transaction is by definition exploitative.
The Claimant had argued that Canada buried the option to lease the 83 acres and thus tainted the dealings, rendering it unsafe to rely on Saulteaux’s understanding and intention when consenting to the absolute surrender in 1960. The Tribunal disagreed, noting that in December 1959, Canada believed that Saulteaux was no longer interested in leasing because of Saskatchewan’s new proposal. The Tribunal found that the evidence did not support a conclusion that Canada concealed the option of a surrender for lease in favour of an absolute surrender.
Duty of Minimal Impairment
The Tribunal held that proposing to use reserve land for a public purpose – in this case, a provincial park – does not automatically trigger the requirement of minimal impairment. Rather, the Tribunal held that when it is proposed to expropriate reserve land for a public purpose then the duty of minimal impairment is triggered. Since this case concerned a surrender untainted by Crown misconduct, the Tribunal did not consider that the duty of minimal impairment applied.
Comments on Saulteaux First Nation v His Majesty the King in Right of Canada 2023 SCTC 1
This decision offers guidance on the content of Canada’s fiduciary obligation to prevent the surrender of reserve lands on terms that would amount to an improvident or exploitative bargain. The Tribunal suggested that Canada will be in breach where there is fraud or abuse, where there is a significant discrepancy between the market value of the land surrendered and the value received by the First Nation, where the First Nation is not given sufficient information to protect its own best interest, or where the Crown acts in a way that taints the proceeding and makes it unsafe to rely on the First Nation’s expressed intention or understanding. The Tribunal indicated that the question of whether a First Nation’s freely taken decision to surrender reserve land is improvident must be viewed from the perspective of the band at the time and without the benefit of hindsight.
This decision also provides guidance on when it will be more effective to employ a direct comparison approach to historical land valuations, versus a subdivision development approach. This decision indicates that, when a claim pertains to a surrender of reserve lands and there is no imminent prospect of subdevelopment, a direct comparison approach will generally be more appropriate.
Finally, this decision confirms that Canada’s duty to minimally impair reserve lands, which applies in the context of an expropriation of reserve lands, does not apply in the context of a freely given surrender untainted by Crown misconduct.
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 any of our lawyers.
1 Saulteaux First Nation v His Majesty the King in Right of Canada, 2023 SCTC 1 at para 85.