Introduction
The Ontario Superior Court of Justice recently released a lengthy decision in Keewatin v. Minister of Natural Resources (Keewatin) that will be of interest to participants in the natural resource sector. The court held that the Province of Ontario lacked authority to “take up” lands for forestry, or other activities that may significantly infringe upon First Nations’ hunting and fishing rights, with respect to certain lands under Treaty 3 (the Keewatin Lands).

This finding has the potential to invalidate provincial laws, including the grant of tenures and licences, in respect of forestry activities, resource extraction and other development activities within the Keewatin Lands. Keewatin may also lead to further challenges to provincial authority to regulate land uses that significantly infringe upon treaty rights. However, as discussed below, the applicability of this decision is likely to be limited to the Keewatin Lands, located in Ontario’s Far North. And, given the jurisdictional implications of this ruling, an appeal to the Ontario Court of Appeal is likely.

Facts
The Grassy Narrows First Nation (Grassy Narrows) initiated litigation in 2000 against Ontario and Abitibi-Consolidated Inc. (Abitibi), following the issuance of forestry licences by Ontario to Abitibi allowing Abitibi to clear cut forests on Crown lands. The cutting area allegedly overlapped with trap lines in the Keewatin Lands – which are comprised of a large area of land that was added to Ontario in 1912 – after the signing of Treaty 3. Grassy Narrows argued that the clear cutting would significantly interfere with their treaty right to hunt and trap. Treaty 3 was signed between Canada and ancestors of Grassy Narrows in 1873 and includes the following clause:

“Her Majesty further agrees with Her said Indians that they, the said Indians, shall have the right to pursue their avocations of hunting and fishing throughout the tract surrendered as hereinbefore described, subject to such regulations as may from time to time be made by Her Government of Her Dominion of Canada, 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 of duly authorized therefor by the said Government.” [Emphasis added]

In 2006, as a preliminary step in the litigation, the court determined that two questions be answered regarding the proper interpretation of Treaty 3 prior to a trial to determine whether the forestry licences in question significantly infringed upon Grassy Narrows’ treaty rights.

Question One

“Does [...] Ontario have the authority within that part of the lands subject to Treaty 3 that were added to Ontario in 1912, to exercise the right to "take up" tracts of land for forestry, within the meaning of Treaty 3, so as to limit the rights of the Plaintiffs to hunt or fish as provided for in Treaty 3?”

The trial judge held that Ontario does not have the right to limit treaty rights by “taking up” lands under the Treaty. The trial judge determined that Ontario could issue land authorizations in respect of Crown lands but “only so long as the authorizations do not have the effect of substantially interfering with treaty harvesting rights.” In order to authorize a “substantial interference” with such rights, Ontario, or users of land already authorized by Ontario to use the land, must also obtain authorization from Canada as contemplated by the Treaty.

Grassy Narrows had argued that the wording of the taking up clause meant that only the federal government had authority to limit their treaty rights by “taking up” lands within the area covered by the treaty. Ontario could only authorize uses of Crown land that do not “significantly interfere” with treaty rights. The effect of this would be that Ontario could only regulate land in ways that “significantly interfered” with Grassy Narrows’ rights with the specific authorization of Canada.

Ontario had argued that a decision that it lacked authority to “take up” lands of which it was the beneficial owner would be a “massive incursion” upon its proprietary rights to lands in Ontario. Ontario urged the trial judge to reject the First Nations’ interpretation of Treaty 3, arguing that the reference to the “Dominion” government was based on the mistaken assumption that Canada would remain the owner of lands subject to Treaty 3, lands which became wholly owned by Ontario in 1912.

A significant portion of the 300-page judgment involves an examination of the historical context surrounding Treaty 3, including the intentions and knowledge of the negotiators for Canada and the Ojibway. Based on this extensive historical evidence, the trial judge determined that negotiators for Canada deliberately provided for Canada to be the only level of government capable of “taking up” lands under Treaty 3.

The trial judge held that Canada’s negotiators were cognizant of the possibility that Ontario may become the beneficial owners of the Keewatin Lands but that Canada reserved the authority to infringe treaty rights to itself in order to protect the treaty rights promised to the Ojibway under Treaty 3. The trial judge made this finding based on evidence of the importance to Canada of ensuring that safe passage could be secured through the Keewatin Lands for the construction of the railroad and the incorporation of lands to the west of Ontario, which were then held by the Hudson’s Bay Company, into a confederated Canada.

While Canada’s sole authority for “taking up” had been released with respect to areas within Treaty 3 outside of Keewatin through legislation amending the Treaty passed in 1891, the trial judge held that Canada maintained this exclusive jurisdiction within this land base.

Question Two

“If the answer to question/issue 1 is "no," does Ontario have the authority pursuant to the division of powers between Parliament and the legislatures under the Constitution Act, 1867 to justifiably infringe the rights of the Plaintiffs to hunt and fish as provided for in Treaty 3?”

The trial judge held that Canada was entitled, pursuant to the Constitution Act, 1867 to make treaty promises that may affect Ontario’s proprietary powers. Ontario could not thereafter legislate in a manner that “significantly infringed” upon those promises.

Ontario had argued that, even if it was not able to “take up” lands under Treaty 3, it could nonetheless authorize the use of lands pursuant to its proprietary powers over lands and resources (s.109 of the Constitution Act, 1867). It argued that these powers allowed Ontario to infringe upon treaty rights if such infringement served a valid legislative objective.

Grassy Narrows had argued that Ontario could not legislate in respect of land so as to “significantly interfere” with treaty rights because this would impinge Canada's jurisdiction over “Indians”. Grassy Narrows argued that the doctrine of inter-jurisdictional immunity, by which a province is prohibited from legislating in a manner that would have an adverse effect on the “core” of a federal head of power (and vice versa), applied as the regulation of treaty rights fell within the “unassailable core” of the federal head of power.

In short, the court held that Ontario lacked the authority to justifiably infringe Grassy Narrows’ treaty rights pursuant to the division of powers in the Constitution Act, 1867.

Implications
Pending a potential appeal, the immediate effect of this decision for the parties involved will be the continuation of litigation to determine whether Ontario “significantly interfered” with Grassy Narrows’ treaty rights by issuing permits to Abitibi for clear cutting within the Keewatin Lands.

That said, this decision may mean that Canada, which made submissions in support of Ontario’s interpretation of Treaty 3 and the division of powers, could co-operate with Ontario to provide authorization for forestry or other operations that allegedly significantly interfere with Grassy Narrows’ treaty rights. The outcome of such an authorization is far from clear, as it would likely require Canada to demonstrate that such infringement is justified in the circumstances.

The trial judge’s decision also raises some uncertainty in regard to land use permits granted by Ontario within the Keewatin Lands. Permits granted by Ontario that are found to “significantly interfere” with treaty rights are, on the face of this decision, invalid. This may invite claims for damages or restitution from First Nations that possess treaty rights within the Keewatin Lands. Though it is difficult to assess the prospect of success of such claims in the abstract, there is now a basis upon which liability for Ontario may arise so long as a First Nation is able to demonstrate a “significant interference” with treaty rights. In assessing whether a “significant interference” has occurred, the trial judge will no doubt be mindful of mitigation measures undertaken by the province and by licence holders. Licence holders should be aware of the legal and strategic implications of this decision, which may create additional leverage for First Nations respecting the regulation of uses of land in certain circumstances.

The impact of this decision on areas falling outside of the Keewatin Lands is somewhat more difficult to assess, as the findings in this decision are based on the evaluation of an extensive historical record and findings of fact which, in many respects, will be confined to the specific circumstances surrounding the negotiation of Treaty 3. While First Nations will likely be able to draw upon the interpretation of the treaty and the constitutional analysis in disputes which arise in other treaty areas in Canada, it is unlikely that the specific findings of the Ontario trial judge will be readily extended to other lands outside of the Keewatin Lands.

Other treaties, including Treaties 6 and 7 which cover portions of Alberta and Saskatchewan, contain essentially the same language in the clause dealing with fishing/hunting/trapping rights at issue in this litigation. However, the legislative and constitutional context surrounding such lands is quite different than the circumstances prevailing over Keewatin. Specifically, the Natural Resource Transfer Agreements in force in the Prairie provinces would need to be considered in determining the authority of those provinces to “significantly interfere” with treaty rights in the same way as Ontario retains such authority over areas falling outside the Keewatin Lands. It should also be noted that the language of other treaty rights clauses, commencing with the negotiation of Treaty 8 (which covers portions of northern B.C., Alberta, Saskatchewan and the Northwest Territories) does not reserve sole authority for “taking up” to the federal government. Instead, Treaty 8 seems to indicate, on its face, that the authority is granted to the “government of the country”, which at the time of the negotiation of these treaties, included provincial and territorial authorities.

For further information, please contact: