On Oct. 23, 2015, Justice Barnes of the Federal Court of Canada rendered its decision inCanada (Attorney General) v. Cold Lake First Nations1, staying the application of the Attorney General of Canada (“Attorney General”) seeking to enforce the First Nations Financial Transparency Act2 (“FNFTA”) against six First Nations.3

Facts

Assented to in March 2013, the FNFTA requires First Nations to, among other things, publicly disclose their audited consolidated financial statements, the remuneration paid and the expenses reimbursed to First Nation chiefs and councillors.

In February 2013, Chief Roland Twinn of Sawridge First Nation (“Sawridge”) had expressed his opposition to the passage of the FNFTA before the Standing Senate Committee on Aboriginal Peoples, indicating his willingness to publicly account for Sawridge’s public funding, but objecting to the disclosure of the financial affairs pertaining to the First Nation’s private commercial operations.

Further to Sawridge and the other First Nations non-compliance with the reporting requirements of the FNFTA, the Attorney General filed, on Dec. 8, 2014, an application seeking an Order compelling the Respondent First Nations to comply with the FNFTA. In response, Sawridge filed an action against the Attorney General in the Court of Queen’s Bench of Alberta challenging the constitutional validity of the FNFTA. This action is based on Sawridge’s asserted Aboriginal and treaty rights, a breach of fiduciary and trust obligations, a breach of its right to self-government, a breach of the duty to consult, and a violation of the equality provisions guaranteed by section 15 of the Canadian Charter of Rights and Freedoms.

With respect to Onion Lake Cree Nation (“Onion Lake”), an affidavit of its Chief stated that as of May 2015, the Department of Aboriginal Affairs and Northern Development Canada had withheld funding to Onion Lake in the amount of $1,034,017.52, payable in connection with band employee benefits. In response, Onion Lake filed an action against the Government of Canada claiming damages and declaratory and injunctive relief on the basis of Charter-based discrimination, failure to consult, a breach of fiduciary duties, and a breach of promises made by the Crown in Treaty 6.

Motions before the Federal Court

The Federal Court heard two motions brought by Sawridge and Onion Lake, respectively, seeking to either enjoin the Attorney General from further prosecuting its application to enforce the financial reporting provisions of the FNFTA or, alternatively, staying such application4 until resolution of their respective legal challenges to the FNFTA in the Court of Queen’s Bench of Alberta and in the Federal Court.

Although the other Respondent First Nations have not brought their own motions, they effectively seek shelter under the motions brought by Sawridge and Onion Lake.

In addition, Onion Lake was seeking injunctive relief against the Minister of Aboriginal Affairs and Northern Development Canada (“Minister”) requiring the Minister to reinstate the funding withheld from it under the FNFTA and enjoining the Minister from taking similar action going forward.

Analysis

Motion for injunctive relief or, alternatively, a stay of the Attorney General’s application

From the outset, Justice Barnes declined to address the motion for injunctive relief, finding the motion for a stay of the application more appropriate and less disruptive than an interim order exempting a First Nation from the obligation to comply with the FNFTA, even though the results are the same in practical terms.

With respect to Sawridge and Onion Lake’s motion to stay the Attorney General’s application pending the outcome of their legal challenges to the FNFTA, Justice Barnes explained that there was considerable overlap in the legal issues that will be material to the outcome of the two legal challenges instituted by the First Nations and the application from the Attorney General and that these actions would involve the development of a considerable evidentiary record. Justice Barnes also referred to the potential inconsistent outcomes based on the evidentiary limitations inherent in an application.

In addition, the Federal Court, in balancing the interests to be considered, noted that the Minister had been warned that the constitutional validity of the FNFTA would be challenged. Justice Barnes also stated that the Supreme Court of Canada has repeatedly held that disagreements of the sort raised in legal proceedings should be the subject of consultation and, where possible, accommodation. In the end, Justice Barnes found that the greater public interest favours the Respondent First Nations and their right to move forward with their litigation.

Onion Lake’s motion for injunctive relief

The test for interim injunctive relief requires the proponent to establish (a) a serious issue; (b) irreparable harm; and (c) that the balance of convenience favour the grant of relief.

While the Attorney General conceded that a serious issue was raised, Justice Barnes was unable to find that Onion Lake had met its burden with respect to irreparable harm in terms of actual economic prejudice. In the absence of an irreparable harm, such as the withholding of funding causing non-compensable harm, the Court notes that the apparent failure to consult by the Crown is insufficient, on its own, to establish irreparable harm. Justice Barnes specified that the denial of Onion Lake’ motion was based only on the lack of evidence of irreparable harm and should not be interpreted as precluding a First Nation to seek interim relief in the future on a stronger evidentiary record.

Decision

Justice Barnes of the Federal Court stayed the application of the Attorney General seeking the enforcement of the FNFTA.

As for Onion Lake’s motion for injunctive relief, Justice Barnes dismissed the motion, but without prejudice to the right of any of the First Nations to apply for injunctive relief on a different evidentiary record.