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Federal Court of Appeal Overturns Limitations Ruling in Major Historic Treaty Claim

The Federal Court of Appeal recently handed down its decision in Canada v Jim Shot Both Sides (2022 FCA 20), finding that the major treaty land entitlement claim was time-barred by the Alberta Limitations of Actions Act.[1] This decision, which relates to 162.5 square miles of land that ought to have been included in the reserve of the Kainai (Blood) Tribe (“Blood Tribe”) since 1883, clarifies the application of limitation periods to historical treaty claims. It overturns a Federal Court ruling that breaches of treaty obligations only became actionable in 1982 following the adoption of s. 35 of the Constitution Act, 1982.[2]

This decision has implications for historic claims by Indigenous groups and the remedies that may be available where there are potential limitation period issues. The First Nation has indicated that they are seeking leave to appeal to the Supreme Court of Canada. Regardless of the outcome, the First Nation can seek damages for the same claim through the Specific Claims process. However, if this ruling is not set aside or settled outside of litigation, there will be statutory limitations on the remedies that the Blood Tribe can obtain for the 162.5 square miles that ought to have been included in their reserve since 1883, including a $150 million statutory cap on damages.

Historical background

In 1877, the Blackfoot Confederacy and the Crown executed Treaty 7, establishing Blood Tribe Reserve No. 148. The size of the reserve was to be determined by the formula “one square mile for each family of five persons, or in that proportion for larger and smaller families”.[3] However, the Blood Tribe has known for some time that the size of their reserve (547.5 square miles) is smaller than it should be under Treaty 7. An action was launched against the Crown in 1980 for breach of treaty (though originally framed in breach of contract), breach of fiduciary duty, as well as fraudulent concealment and negligence (the “1980 Action”). The 1980 Action was held in abeyance for many years before ultimately coming to trial in 2019 in the Federal Court (2019 FC 789).

Decision of the Federal Court

Among several other findings, the Federal Court determined that the size of the Blood Tribe reserve was understated by 162.5 square miles. As a result, Canada failed to fulfil its obligations under Treaty 7 and breached its fiduciary duty in implementing the treaty, and in dealing with the Blood Tribe subsequent to the creation of the reserve. The Court concluded that limitation periods apply to treaty claims, and the treaty land entitlement (“TLE”) claim was discoverable as early as 1971. The claim would therefore normally be time-barred by the six-year limitation period applicable at the time of the 1980 Action. However, this conclusion was subject to a determination on whether an action for breach of treaty could have been pursued prior to the coming into force of section 35 of the Constitution Act, 1982.

Although the Federal Court found that treaty rights existed prior to 1982, it held they were not enforceable in court until section 35 came into force.[4] The Court relied upon the act of state doctrine, a principle of international law, which provides that domestic courts do not have the competence to interpret and give effect to treaties between foreign and sovereign nations, unless incorporated into a domestic law conferring a right of action. The Court found that Treaty 7 was not incorporated into Canadian law until 1982 and therefore an action for breach of treaty obligations could not be pursued in a Canadian court prior to that time. Thus, according to the Federal Court, the limitation period only began to run in 1982 when the Blood Tribe’s claim became a proper cause of action. As the Blood Tribe’s TLE claim was not time-barred, the claim was allowed.

This decision did not determine the quantum of damages to be awarded as this issue was deferred to Phase III of the trial which was scheduled to commence in November 2021. The Blood Tribe was seeking the loss of present value of the lands and the loss of economic benefits of the lands from 1883 to the present, including from agriculture, mines, and mineral production (particularly oil and gas).

Analysis

In the appeal, the appellant Attorney General of Canada argued that the trial judge incorrectly characterized treaties as international agreements, and mischaracterized section 35 of the Constitution Act, 1982 as creating a new cause of action where none existed previously. The Blood Tribe argued that the trial judge was correct in both regards. The Court of Appeal agreed with the Attorney General.

Aboriginal treaties are not international agreements

The Court of Appeal held that the act of state doctrine, which applies to international treaties, does not apply to Aboriginal treaties in Canada, which are sui generis. The Court agreed that it was not entirely clear whether the trial judge had concluded that Aboriginal treaties were true international treaties, but concluded that the debate was not important – it was clear that a public international law framework was incorrectly applied.

Treaty rights are distinct from Aboriginal rights

The Court of Appeal further noted that treaty rights are not the same as Aboriginal rights, concluding that the Federal Court had improperly applied Aboriginal rights law to a treaty issue. Noting this distinction, the Court of Appeal stated that “[p]rior to 1982, they were conceptually, historically and jurisprudentially different, and the fact that an action to enforce an Aboriginal right may not have been recognized prior to 1982 does not mean that a treaty right would suffer the same fate.”[5]

Aboriginal rights flow from the customs, practices, and traditions of Indigenous peoples before European contact. Treaty rights, while sometimes confirming or regulating Aboriginal rights or creating reserves, ultimately flow from treaties, which the Court of Appeal found were enforceable prior to 1982, as discussed below.

Numbered treaties were enforceable in Canadian law before 1982

The Court of Appeal also took issue with other arguments offered to suggest that treaties were not enforceable prior to 1982. The Court found that the cases cited by the Federal Court did not establish that Treaty 7 was unenforceable in a Canadian Court prior to 1982; rather, they established the uncontroversial point that treaties occupy a unique place in Canadian law. Likewise, the Court of Appeal found that the lack of a statutory cause of action in the Indian Act did not preclude an action prior to the Constitution Act, 1982, because enforcement of a treaty right has never been contingent on the Indian Act containing such a clause.

The Court of Appeal found that not only is there a long line of jurisprudence establishing the enforceability of numbered treaties going back to well before 1982, but these cases also establish that “Canadian courts have been agnostic to how treaties are legally classified and as to the means or “form” by which their terms are enforced”.[6] The fact that Aboriginal treaties are not contracts, in the usual sense, is not a bar to recognizing treaty rights even if they were pleaded in contract. The underpinning principle of the honour of the Crown is unaffected by the manner in which such rights are pleaded, and as the Court noted “[t]reaties are more than contracts, not less.”[7]

The Court of Appeal considered, and rejected, arguments that the Constitution Act, 1982 created a new cause of action unaffected by the statutory limitation period, and that courts have the discretion to waive a statutory limitation period. The claims in the 1980 Action were time-barred and could not be otherwise saved.

Conclusion

The Court held that, although the 1980 Action was time-barred, the underlying claims were not time-barred from being brought before the Specific Claims Tribunal (established under the Specific Claims Tribunal Act,[8] the “SCT Act”), which was designed to address grievances relating the failure to fulfill historic treaty obligations or other legal obligations relating First Nations lands and other assets. Under the SCT Act, a First Nation may file a claim for compensation arising from a failure to fulfil a legal obligation of the Crown to “provide lands or other assets” under a historic treaty or another agreement between the First Nation and the Crown,[9] among other possible bases for a claim.

The SCT Act specifically precludes time-limitation defenses,[10] however, it also limits damages to monetary compensation, which is capped at $150 million.[11] If the claim is not settled, these points may have significant implications for the Blood Tribe, because this limitation on damages prevents an award of land, which was sought in the alternative to monetary damages, and limits monetary damages to far below the $3 billion estimated by the Blood Tribe’s damages expert.[12] While it is not a relevant limitation in this case, the SCT Act also limits the types of claims that can be decided by the Tribunal which could exclude certain other time-barred claims.[13]

This case confirms and clarifies the law on the enforceability of Aboriginal treaties prior to 1982. Perhaps equally importantly, it provides a thorough summary on the legal nature of Aboriginal treaties, and their unique place in the legal framework of Canada. As Aboriginal treaties are sui generis, they are neither contracts nor agreements between sovereign independent nations. Although Aboriginal treaties are unique, this case highlights in detail that such treaties are not without a well-developed body of case law.

 

[1] Limitation of Actions Act, RSA 1970, c 209.

[2] The Constitution Act, 1982, Schedule B to the Canada Act 1982 (UK), 1982, c 11.

[3] Canada v Jim Shot Both Sides, 2022 FCA 20 at para 3 (“FCA Decision”).

[4] Canada v Jim Shot Both Sides, 2019 FC 789 at para 474 (“FC Decision”).

[5] FCA Decision, supra, at para 102.

[6] Ibid at para 175.

[7] Ibid at para 100.

[8] Specific Claims Tribunal Act, SC 2008, c 22 (“SCT Act”).

[9] Ibid, s 14(1)(a).

[10] Ibid at s 19.

[11] Ibid at at ss 20(1)(a)-(b).

[12] Jim Shot Both Sides v. Canada, 2021 FC 282 at para 6.

[13] SCT Act, supra, at section 15.

Federal Court of Appeal 2022 FCA 20 the Alberta Limitations Act Federal Court First Nations Treaty 7 treaty land entitlement

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