Introduction

On March 18, 2013, the Court of Appeal for Ontario (ONCA) issued its highly anticipated reasons in Keewatin v. Ontario (Natural Resources),¹ unanimously allowing the appeals of Resolute FP Canada Inc. and the governments of Ontario and Canada. The decision clears up considerable uncertainty that resulted from the lower court decision (2011 ONSC 4801), which suggested that Ontario did not possess jurisdiction to "take up" lands in the Keewatin area of Ontario without prior authorization of the federal government, based on the trial judge’s interpretation of a "harvesting clause" in Treaty 3. The ONCA confirmed that valid provincial laws over forestry, mining and other matters continue to apply in Treaty 3 territory in Ontario and are entirely consistent with the terms of Treaty 3.

Background

Treaty 3 was entered into in 1873 between Canada and the Saulteaux Tribe of the Ojibway Indians (Ojibway) in respect of lands in what is now northwestern Ontario and eastern Manitoba. The Ojibway surrendered their interest in the lands in exchange for certain benefits, including rights to hunt and fish, except on tracts "required or taken up for settlement, mining, lumbering or other purposes by [the] Government of the Dominion of Canada" (Harvesting Rights). The pertinent clause stated:

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 duly authorized therefor by the said Government. [emphasis added] (Harvesting Clause)

The plaintiffs were members of the Grassy Narrows First Nation, descendants of the Treaty signatories. They applied for judicial review of a decision by Ontario’s Minister of Natural Resources (Ontario) to issue a licence for clear-cut forestry activities to Resolute FP Canada Inc. (then Abitibi-Consolidated Inc.), alleging that the licence violated the Harvesting Clause. Two questions were put before the trial judge:

1. whether Ontario has authority to "take up" lands for forestry, within the meaning of the Harvesting Clause, so as to limit the Harvesting Rights (Question One); and
2. if the answer to Question 1 is "no," whether Ontario has the authority, pursuant to the constitutional division of powers between Parliament and the legislatures, to justifiably infringe the Plaintiffs’ Harvesting Rights (Question Two).

The trial judge answered "no" to both questions. In respect of Question One, she concluded that the Harvesting Clause had the effect of imposing a two-step process requiring the authorization of Canada in order for Ontario to "take up" lands throughout the Treaty 3 area. She also concluded that Canada’s jurisdiction over "Indians, and Lands Reserved for the Indians" under s. 91(24) of the Constitution Act, 1867 gave Canada a residual right to authorize Ontario’s taking up of its own lands. In respect of Question Two, the trial judge held that Ontario could not justifiably "infringe" the Harvesting Rights, which she determined were within federal jurisdiction under s. 91(24).

The Decision

The ONCA overturned the lower court’s decision and answered "yes" to Question One, concluding that Ontario can avail itself of the "taking up" powers under Treaty 3, so as to limit the Plaintiffs’ Harvesting Rights, without authorization from the federal government. Having answered Question One in the affirmative, the ONCA held that it did not need to answer Question Two. The ONCA concluded that the trial judge erred in both law and fact in interpreting the Harvesting Clause and its effect by failing to apply governing constitutional law principles and by misapplying the facts.

1. Interpretation of the Harvesting Clause within the constitutional framework

The ONCA stated that the Harvesting Clause must be interpreted within the proper constitutional framework, including the divided legislative authority between Canada and the provinces set out in the Constitution Act, 1867. Canada has exclusive legislative jurisdiction over "Indians, and Lands reserved for the Indians" under s. 91(24), while s. 109 gives beneficial ownership to Ontario of Crown lands within Ontario, subject to any trust or other interest in those lands (including existing aboriginal interests); s. 92(5) gives Ontario exclusive legislative jurisdiction to manage and sell public lands and the timber and wood thereon; and s. 92A grants further legislative powers to Ontario in respect of non-renewable natural resources, forestry resources and electrical energy.²

The ONCA held that the trial judge’s suggestion that the Treaty 3 Commissioners could limit Ontario’s constitutional rights and responsibilities by requiring that Canada approve Ontario’s "taking up" of lands is "fundamentally at odds with this established constitutional framework and cannot be sustained."³ The Court emphasized the internal limitations of the Treaty:

The Ojibway’s Treaty partner is the Crown, not Canada. Canada is not a party to the Treaty. The Treaty promises are made by the Crown, not by a particular level of government. The Ojibway may look to the Crown to keep the Treaty promises, but they must do so within the framework of the division of powers under the constitution. As was specifically held in St. Catherine’s Milling, Canada, Morris and the other Commissioners who negotiated the Treaty had no authority to depart from the constitution’s allocation of powers and responsibilities and no power to deprive Ontario of the beneficial ownership that developed to the province when Ontario’s borders were expanded.⁴ [emphasis added]

The ONCA considered St. Catherine’s Milling and Lumber Company,⁵ an 1888 decision in which the Privy Council held that Treaty 3 was made between the Ojibway and the Crown, not Canada. The Privy Council held that the Treaty 3 Commissioners had "neither authority nor power to take away from Ontario the interest which had been assigned to" it by s. 109. Once the beneficial interest in the lands passed to Ontario at Confederation, Canada lost the right to "take up" the lands. Further, Canada’s jurisdiction to legislate in relation to "Indians, and Lands Reserved for the Indians" under s. 91(24) was "not in the least degree inconsistent" with Ontario’s right to manage and benefit from the lands. In Smith v. Canada, the Supreme Court of Canada (SCC) affirmed that Ontario has complete beneficial ownership of its lands under s. 109 "without further burden by reason of s. 91(24)."⁶

2. Principle of constitutional evolution

The ONCA held that the trial judge also failed to apply the principle of constitutional evolution in interpreting the Harvesting Clause. This principle means that the Crown’s allocation of legislative and administrative powers and responsibilities to different levels of government may change over time. Treaties with First Nations are solemn agreements that are intended to last indefinitely, therefore they "must be capable of adapting to the natural evolution of the constitution, which evolves as a ‘living tree,’ in order to meet ‘the changing political and cultural realities of Canadian society.’"⁷

The ONCA reiterated that the promise made in the Harvesting Clause to the Ojibway was that of the Crown, not Canada. When Ontario became beneficial owner of the Keewatin Lands by virtue of the 1912 Legislation and s. 109, by operation of law, both the benefit and the burden of the Harvesting Clause was assigned by the Crown to Ontario.⁸

3. Text of the Harvesting Clause

The ONCA held that the text of the Harvesting Clause did not reflect or contemplate a two-step approval for taking up land involving two levels of government. The reference to the "Government of the Dominion of Canada" in the Harvesting Clause reflects that in 1873, when the Treaty was signed, the Keewatin lands were Canada’s. However, when beneficial ownership of the lands transferred to Ontario, Ontario took the place of Canada as the level of government with the capacity to take up lands, subject to the Harvesting Rights.

The ONCA also found the trial judge’s imposition of a two-step approval process problematic and unnecessary in order to protect the interests of the Ojibway:

Finally, the trial judge’s interpretation produces a process that is unnecessary, complicated, awkward and likely unworkable. The two-step process is unnecessary to protect the Aboriginal Treaty harvesting right because when the Crown, through Ontario, takes up land, it must respect the Treaty right. When Ontario stepped into Canada’s shoes by virtue of the process of constitutional evolution, the legal standard that binds the Crown did not change and the Treaty right is fully protected. To require both levels of government to be engaged in a two-step process is, on its face, complicated and awkward. It is difficult to see how the process of consultation, which is required when the Treaty harvesting right is affected by taking up, would be improved by involving both levels of government.⁹

The ONCA commented that a two-step approval process could also undermine the goal of reconciliation:

The trial judge’s conclusion that Canada retains a role in Ontario’s use of the taking up provision could undermine, rather than advance, reconciliation. Leaving meaningful constitutional space for the exercise of provincial jurisdiction under ss. 109, 92(5) and 92A, without federal control under s. 91(24), fosters direct dialogue between the province and Treaty 3 First Nations. Such dialogue is key to achieving the goal of reconciliation.¹⁰

4. Historical evidence regarding the Harvesting Clause

The ONCA further held that the facts did not support the trial judge’s thesis that the Treaty Commissioners intentionally drafted the Harvesting Clause to require Canada’s approval for Ontario to take up lands. Nothing in the evidence supported this finding. Further, the 1891 legislation, 1894 provisional boundary agreement and 1912 legislation simply confirmed that the Keewatin lands belonged to Ontario, and Ontario did not need Canada’s permission to take up lands that it beneficially owned. Once the Keewatin lands became part of Ontario in 1912, Ontario stepped into the shoes of Canada for the purposes of the Harvesting Clause, and the Crown’s rights and obligations devolved to Ontario.

5. Relationship between S. 91(24) and Ontario’s taking up

The trial judge concluded that as a result of Canada’s s. 91(24) federal jurisdiction over "Indians," Canada also had a residual and continuing role in respect of Ontario’s taking up under the Harvesting Clause. However, the ONCA held that the Harvesting Clause, short of infringement, does not engage s. 91(24) and that the trial judge erred in three ways.

First, she erred with respect to the constitutional division of powers. Such an expansion of federal jurisdiction would "render illusory provincial jurisdiction over the disposition and management of public lands and forests under ss. 109, 92(5) and 92A."¹¹ Second, her conclusion could not be reconciled with St. Catherine’s Milling and Smith. It would also be contrary to the SCC’s emphasis on balanced federalism and that "a federal head of power cannot be given a scope that would eviscerate a provincial legislative competence."¹² Third, her finding was inconsistent with the SCC’s decision in Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage).¹³

In respect of Mikisew, the ONCA noted the important distinction between a provincial taking up that would leave no meaningful harvesting right in a First Nation’s traditional territories from a taking up that would have a lesser impact. The former would infringe the First Nations’ treaty rights, whereas the latter would not. Mikisew is clear that where it is claimed that a taking up will infringe a treaty right, the remedy is to bring an action against the province for treaty infringement. An action for infringement does not engage Canada in a supervisory role by virtue of s. 91(24).

6. Constitutional safeguards for First Nations

The ONCA held that significant protections are already in place for aboriginal peoples, without placing Canada in a supervisory role over Ontario. These protections are grounded in the principle of the honour of the Crown and s. 35 of the Consititution Act, 1982, including the Crown’s duty to consult. The ONCA noted that Ontario must recognize the rights of First Nations in the Keewatin lands to the same extent that Canada did prior to 1912. In exercising its rights to take up lands, Ontario must uphold the honour of the Crown, consult with First Nations and accommodate treaty rights as appropriate, whenever they are sufficiently impacted.

7. Question Two

Having answered "yes" to Question One," the ONCA declined to answer Question Two. However, the ONCA noted "that nothing in these reasons should be construed as approval of the trial judge’s reasoning or result in respect of the second threshold issue."¹⁴

The ONCA’s reasons in answering Question One shed some light on how it might have answered Question Two. The ONCA pointed out the important distinction between a limit on treaty rights and an infringement on treaty rights; that only the latter requires justification within the framework set down by the SCC in R. v. Sparrow.¹⁵ The ONCA pointed out that in Mikisew, the SCC was clear that not every taking up constitutes an infringement of treaty rights that must be justified according to Sparrow. Put another way, the taking up provision operates as a limit on the Harvesting Rights, not an extinguishment of such rights.¹⁶

These observations support our view that Question Two was not properly framed for the trial judge. Question Two only addresses an infringement of treaty rights and therefore it presupposes that Ontario had infringed the Harvesting Rights simply by taking up lands. However, Question Two does not allow for the fact that the province may impose limits on treaty rights without constituting an infringement of treaty rights or intruding on s. 91(24).

In our view, Question Two as it was framed for the trial judge is already settled law. The SCC in R. v. Morris¹⁷ and in earlier cases has provided a full answer to the issue. The SCC has confirmed that provinces cannot "infringe" aboriginal or treaty rights, because the term, "infringement" means to exceed provincial jurisdiction and impose on federal jurisdiction over "Indians and Lands Reserved for the Indians" under s. 91(24). Any "infringement" of the core of federal jurisdiction is ultra vires the province, and provinces cannot rely on the Sparrow justification analysis for infringement of a treaty right. However, this does not mean that provinces cannot otherwise limit aboriginal or treaty rights up to the point of infringement. In our view, Morris provides a complete analysis for determining the distinction between a limit and an infringement.

Discussion

In our view, the ONCA’s decision confirms and clarifies the state of the law as it has existed since Treaty 3 was signed; it does not create new law. The ONCA was clear that that the terms of Treaty 3 continue to apply with Ontario as beneficial owner of the Keewatin lands, and that the First Nation signatories to Treaty 3 continue to enjoy the Harvesting Rights on the Keewatin lands. The Harvesting Rights are subject to "taking up" from time to time by the Crown (in this case, Ontario), provided that the Crown upholds the honour of the Crown and fulfils its duty to consult with potentially affected aboriginal peoples. The ONCA also noted that there had been no challenge to Ontario’s rights to take up the lands until this case arose.

Note

McCarthy Tétrault LLP was co-counsel with Cassels Brock in this appeal, acting for the intervener, Goldcorp Inc.

¹ 2013 ONCA 158 (Keewatin).
²Keewatin, at 103 – 111.
³ Ibid., at 134.
⁴Ibid., at 135.
⁵ (1888), 14 A.C. 46 (St. Catherine’s Milling).
⁶ [1983] 1 S.C.R. 554 (Smith) at p. 562, cited in Keewatin, at 130.
⁷Keewatin, at 137.
⁸ Ibid., at 140.
⁹Ibid., at 153.
¹⁰ Ibid., at 154.
¹¹Ibid., at 205.
¹²Reference Re Securities Act, 2011 SCC 66, cited in Keewatin, at 205.
¹³ 2005 SCC 69 (Mikisew).
¹⁴ Keewatin, at 215.
¹⁵ [1990] 1 S.C.R. 1075 (Sparrow).
¹⁶1bid., at 226.
¹⁷ 2006 SCC 59 (Morris).