INTRODUCTION

The Ontario Court of Appeal (the Court) recently released its decision in Keewatin v. Ontario (Natural Resources), (Keewatin), overturning an Ontario Superior Court ruling which had held that the Province of Ontario could not "take up" land within a certain portion of the surrendered lands covered by Treaty 3, without first obtaining Canada's approval. Our September 2011 Blakes Bulletin on the trial judge's decision can be accessed here.

The Court's decision confirms Ontario's exclusive legislative authority to manage and undertake land use authorizations or dispositions of public lands in the Treaty 3 area located within Ontario, including the Keewatin Lands, without requiring the Ontario government to obtain Canada's approval. The Court also re-iterated that Ontario, on behalf of the Crown, is legally obliged to respect the Treaty harvesting rights, through consultation and accommodation of the affected First Nations.

FACTS

In 2000, members of the Grassy Narrows First Nation commenced legal proceedings against the Province of Ontario and Abitibi-Consolidated Inc. (Abitibi, now Resolute FP Canada Inc.), after the Ontario Minister of Natural Resources had issued a sustainable forest licence to Abitibi allowing it to carry out clear-cut forestry operations in parts of the Whiskey Jack Forest. The Whiskey Jack Forest falls within the Keewatin portion of the territory covered by Treaty 3, entered into by Canada and the Saulteaux Tribe of the Ojibway Indians in 1873 (the Keewatin Lands). These lands were within a federal territory at the time; however in 1912 they became a part of Ontario, following the passage of legislation regarding Ontario's boundaries. Grassy Narrows alleged that the forestry operations were in violation of their hunting and fishing rights under the "take up" clause of Treaty 3. The "take up" clause provides that they have the right to hunt and fish on the surrendered lands, "...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."

In 2006, the court ordered that two questions had to be answered as part of a first phase of the litigation. The first question was whether Ontario has the authority within that part the Treaty 3 lands 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 plaintiffs' rights to hunt or fish as provided for in the Treaty. Second, if the answer to the first question was "no," did Ontario have the authority pursuant to the division of powers 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 in Keewatin answered both questions in the negative, holding that Ontario could not "take up" land in the Keewatin Lands so as to limit harvesting rights without first obtaining Canada's approval. Ontario, Canada, and Abitibi appealed, and this became the central issue on the appeals.

THE COURT OF APPEAL'S DECISION

The Court allowed the appeals. On the first question, the Court held that the trial judge's decision was inconsistent with governing constitutional provisions and principles, that the Treaty text did not support the trial judge's interpretation of its meaning, and that the trial judge had made a palpable and overriding error in her related factual findings. (Having answered the first question in the affirmative, the Court did not analyse the second question, but stated that nothing in its reasons should be construed as approval of the trial judge's reasoning or result in respect of the second question.)

Trial Judge Failed to Apply Governing Constitutional Principles in Interpretation of Take Up Clause

In reviewing the relevant constitutional provisions, the Court noted that section 109 of the Constitution Act, 1867 grants Ontario beneficial ownership of Crown lands within the borders of Ontario, subject to any trust or other interest in those lands, including existing aboriginal interests. Under section 92(5) of the Constitution Act, 1867, Ontario has exclusive legislative jurisdiction to manage and sell public lands belonging to the Province. Section 92A confers on the provinces powers with respect to non-renewable natural resources, forestry resources and electrical energy. Taking these together, the Court held, "Ontario's beneficial ownership, combined with the exclusive legislative authority to manage and sell the lands, embraces the things that would amount to taking up lands governed by Treaty 3 'for settlement, mining, lumbering or other purposes', including in the Keewatin Lands."

The Court held that the taking up clause in the present case had to be interpreted in light of "the process of constitutional evolution" from the time of the Royal Proclamation in 1763 through to the extension of Ontario's border in 1912. It noted that the principle of constitutional evolution has an important bearing upon treaties with First Nations, since such treaties are intended to last indefinitely. The Court held that, "Treaties must be capable of adapting to the natural evolution of the constitution, which evolves as a 'living tree' to meet 'the changing political and cultural realities of Canadian society'."

Central to the decision was the fact that Treaty 3 was concluded between the Ojibway and the Crown, not Canada or a particular level of government. The Court noted that throughout the process of constitutional evolution, the Crown and its relationship with Canada's Aboriginal Peoples remained constant. What changed was "the level of government on whose advice the Crown acts." The responsibility for the Crown's treaty promises is determined by the constitutional allocation of powers, which evolves as the constitution evolves. When the beneficial title of the Keewatin Lands was transferred to Ontario, the power of Canada as beneficial owner to take up lands under the harvesting clause devolved to Ontario. The interest assigned to Ontario as beneficial owner also carries with it the burden of the harvesting clause imposed by the Treaty, and, "In the exercise of its rights and powers as beneficial owner, Ontario is legally obliged to ensure that its actions on behalf of the Crown are consistent with the promises made by the Crown."

The Court rejected a literal reading of the "take up" clause. It noted that if the text of the clause were to be read literally, only Canada could take up lands. The Privy Council, in an 1888 decision relating to the rest of the Treaty 3 lands that now fall within Ontario (the Keewatin Lands only constitute a portion of the Treaty 3 lands) had already held that once the beneficial interest in the lands passed to Ontario, Canada lost the right to "take up" the lands. Therefore, reading the clause literally "would put the taking up clause in a legalistic straightjacket", as the Court phrased it, since this would leave no level of government with the authority to take up any of the surrendered lands.

The Court found that the trial judge was only able to escape this impossible result by reading into the clause a two-step land use regime, requiring Canada's approval, which could not be derived from the literal wording. The Court held that the text of the clause provides for taking up by one level of government; Canada was specified as the government with the capacity to take up lands since at the time of the Treaty it was believed that Canada enjoyed beneficial ownership of all Treaty 3 lands. When the beneficial ownership changed, Ontario took the place of Canada as the level of government with the capacity to take up lands subject to the rights guaranteed by the Treaty. The Court held that the language of the clause is not ambiguous, and, to the extent that the trial judge's interpretation rested on such a finding, it held, "Even a generous interpretation must be realistic, and reflect the intention of both parties and reconcile their interests."

Ontario's Taking Up Power Subject to Obligations Flowing from Honour of the Crown

In its discussion of the interpretation of the 1912 legislation regarding Ontario's boundaries, the Court also held that since that legislation required Ontario to recognize the rights of the Indians in the Keewatin Lands to the same extent that Canada had recognized such rights, Ontario could take up Keewatin Lands under the Treaty only to the same extent that Canada could validly do so prior to 1912. The Court stated, "In light of modern constitutional jurisprudence, this means that Ontario's taking up power is subject to the limitations and obligations flowing from the honour of the Crown and s. 35 of the Constitution Act, 1982." 

Therefore, Ontario's section 109 powers with respect to Treaty 3 lands are subject to aboriginal Treaty harvesting rights. Ontario cannot take up lands so as to deprive the First Nation signatories of a meaningful right to harvest in their traditional territories. The Court emphasized that "Ontario accepts that when contemplating land use authorizations or dispositions that may adversely affect Treaty 3 harvesting rights, it is constitutionally required to consult the affected persons and, where appropriate, accommodate those rights to ensure that each Treaty 3 First Nation has a meaningful ability to exercise its harvesting rights." As noted above, however, Ontario is not subject to federal government supervision or approval in carrying out these obligations.

IMPLICATIONS

This decision has positive implications for participants in the natural resources sector. It restores a measure of certainty as regards the validity of land use permits granted by Ontario on Treaty 3 Lands. In confirming that Ontario is not subject to federal supervision in carrying out its consultation obligations, the Court rejected what would have been a "complicated and awkward" two-step process requiring the engagement of both levels of government when a Treaty harvesting right is affected by the taking up of lands. The Court commented that the process of consultation and accommodation of First Nations interests would not have been improved by involving both levels of government. In that vein, the Court considered that the practical effect of the Ontario Superior Court decision would be to hinder a direct dialogue between Ontario and Treaty 3 First Nations.

On a broader national level, the Court's discussion of the role of the principle of constitutional evolution in the interpretation of First Nations treaties will be important in the analysis of any future disputes which arise in other treaty areas in Canada, and in particular any that involve similar clauses or language.