The Supreme Court of Canada’s recent judgment in First Nation of Nacho Nyak Dun v Yukon, 2017 SCC 58 (Nach Nyak Dun), has outlined the appropriate role of the Court in resolving modern treaty disputes. The judgment indicates that the Courts will pay close attention to and largely defer to the treaty terms stipulated by governments and First Nations, but will remain vigilant to ensure that governmental conduct is consistent with its constitutional obligations and the honour of the Crown.

The judgment provides key guidance to First Nations as well as federal and provincial governments in regards to the treaty negotiation process and the standard of conduct expected during the implementation of modern treaties.

Factual Background

At issue in Nacho Nyak Dun was Yukon’s compliance with a framework agreement (the “Framework”) for negotiating treaties with First Nations, and a number of treaties which had been negotiated under the Framework. The Framework had established a collaborative regional land use planning process for negotiating land claims agreements, and had been used to negotiate related treaties or agreements (the “Agreements”) between Yukon and several First Nations.

The Agreements established the planning process for land use in the Peel Watershed Region of Yukon (the “Region”). The Region comprised one of the largest intact wilderness watersheds in North America, and was nearly untouched by contemporary development. The Region included the traditional territories of several First Nations.

The Framework and Agreements had established a commission to develop a land use plan for the Region (the “Commission”). After several years of research and consultation, the Commission issued an initial recommended plan to Yukon and affected First Nations, thus triggering the plan approval process under the Agreements. The approval process required Yukon to approve, reject or propose modifications to the initial recommended plan. The parties initially filed a joint response to the recommended plan. Further responses were subsequently filed by affected First Nations and Yukon. Yukon’s response included two statements expressing its interest in a revised plan with increased options for access to and resource development in the Region.

As required by the Agreements, the Commission reconsidered the initial recommended plan in light of the parties’ joint response and subsequent submissions. However, the Commission did not consider Yukon’s statements of interest in a revised plan on the basis that the statements lacked sufficient detail. Several months later, Yukon proposed extensive changes to the Commission’s final recommended plan, even though the changes had not been proposed earlier in the process. Yukon proceeded with consultations on its proposed changes without the coordinated involvement of First Nations, and then approved a land use plan for non-settlement lands in the Region – lands which were not held by First Nations pursuant to the Agreements. Yukon took the position that Yukon and First Nations each had ultimate authority to approve, reject or modify the part of the final recommended plan which applied to lands under their authority.

The affected First Nations commenced legal proceedings, seeking declarations and orders that Yukon had failed to properly consult with First Nations, requiring Yukon to reinstitute consultations on the final recommended plan, and limiting Yukon’s powers to modify or reject any further recommended plan from the Commission.

Rulings of the Yukon Supreme Court and the Yukon Court of Appeal

The Yukon Supreme Court declared that Yukon had failed to comply with the planning process set out in the Agreements and quashed the land use plan approved by Yukon for non-settlement lands. The Court further ordered Yukon to reinstitute the second consultation and then either approve the final recommended plan or modify it based on modifications it had proposed earlier in the planning process.

The Yukon Court of Appeal set aside the part of the trial judge’s order which returned the parties to the second round of consultation. The Court of Appeal found that Yukon had failed to properly exercise its right to propose modifications to the initial recommended plan and returned the parties to an earlier stage in the process, where Yukon could remedy this failure. It also overturned the limits imposed by the trial judge on the scope of Yukon’s ability to reject the Commission’s final recommended plan and concluded that the scope of the authority was broad.

Judicial Treatment of Modern Treaties

The Supreme Court of Canada outlined the principles which govern the judicial treatment of modern treaties. Modern treaties were intended to renew the relationship between Indigenous peoples and the Crown to one of equal partnership.[1] As a result, the Courts are generally to leave space for the parties to govern together and work out their differences. It was not the appropriate judicial role to closely supervise the conduct of the parties at every stage of the treaty relationship.[2]

Furthermore, compared to their historical counterparts, modern treaties are detailed documents that warrant deference to their text. Modern treaties are “meticulously negotiated by well-resourced parties” and are “designed to place Aboriginal and non-Aboriginal relations in the mainstream legal system with its advantages of continuity, transparency, and predictability”.[3] Paying close attention to the terms of a treaty requires interpreting the provision at issue in light of the treaty’s text as a whole and its objectives.[4]

On the other hand, the Supreme Court noted that modern treaties are constitutional documents, and Courts play a critical role in safeguarding the rights they enshrine.[5] Modern treaties are not to be interpreted “in an ungenerous matter or as if [they] were … everyday commercial contract[s]”. While the Courts must “strive to respect the handiwork” of modern treaties, that was always subject to “such constitutional limitations as the honour of the crown”.[6]

These interpretive principles ensure that modern treaties advance reconciliation, which was founded partly “in the respectful fulfillment of a modern treaty’s terms”.[7]

Yukon’s Violation of Treaties with First Nations

Applying these interpretive principles, the Supreme Court found that the Agreements did not authorize Yukon to make extensive changes to the final recommended plan. The language of the Agreements indicated that the power to modify a final recommended plan was a limited exercise which did not extend to an alteration of the fundamental nature of the plan. The power to modify was also limited by the requirement of prior consultation. Under the Agreements, prior consultation required Yukon to provide sufficient notice to affected parties of contemplated modifications, and to then accord “full and fair consideration” to the views which were presented.

The context of the relevant provisions indicated that the Agreements had established a comprehensive process for how Yukon and First Nations would collectively govern settlement and non-settlement lands. That process included consultation and meaningful participation for Yukon First Nations in the land use planning process for their traditional territories, which were situated in both settlement and non-settlement areas. Background evidence on the negotiations which led to the Agreements indicated that First Nations had agreed to receive relatively smaller settlements areas in exchange for meaningful participation in land use management for all of their traditional territories.

The Court thus concluded that Yukon’s authority to modify a final recommended plan was limited to two circumstances. Firstly, Yukon could proposed modifications it had proposed earlier in the process. Secondly, Yukon could modify a final recommended plan in response to changing conditions, which could arise, for instance, from consultations on the final recommended plan or changes proposed by the Commission. However, Yukon could not modify a final recommended plan so significantly as to effectively reject it.

In this instance, Yukon had not proposed modifications to the initial recommended plan in sufficient detail to allow the Commission to respond in a meaningful way. The significant changes Yukon made to the final recommended plan had not been advanced earlier in the process. Furthermore, Yukon had failed to properly consult First Nations on these changes as required by the Agreements. This conduct was unbecoming of the honour of the Crown and Yukon’s approval of its plan was thus quashed.

In granting a remedy, the Supreme Court directed the parties to return to the stage in the process where Yukon could approve, modify or reject the final recommended plan following consultations. The Court of Appeal had erred in returning the parties to an earlier stage of the process on the basis that Yukon had failed to exercise its right to modify the initial recommended plan. That remedial approach was inconsistent with the appropriate judicial role in resolving modern treaty disputes. When the initial recommended plan was issued, Yukon had chosen not to exercise its right to advance the significant changes it eventually proposed. By permitting Yukon to return to a stage in the process where it could then advance those significant changes, in the form of modifications to the initial recommended plan, the Court of Appeal had improperly inserted itself into the treaty relationship between Yukon and the First Nations.

Key Takeaways

The judgment in Nacho Nyak Dun highlights the importance of a detailed and well-drafted modern treaty and the need for the parties to act diligently in the implementation of their agreements. There is a presumption that modern treaties are detailed documents negotiated by well-resourced parties, thus warranting a deferential approach from the Courts. This presumption could be rebuttable in appropriate circumstances. However, it highlights the need for proper and competent legal advice over the course of the treaty negotiation process.

In regards to the implementation of modern treaties, the Supreme Court noted that “[i]t is up to the parties, when treaty issues arise, to act diligently to advance their respective interests”.[8] It was on that basis that the Supreme Court declined to return Yukon to an earlier stage in the planning process. Yukon had to “bear the consequences of its failure to diligently advance its interests and exercise its right to propose access and development modifications to the [initial recommended plan]”.[9] This reasoning again highlights the need for diligence and the engagement of legal counsel where appropriate during the implementation of modern treaties.

First Nations can also take some comfort from the judgment in Nacho Nyak Dun. It indicates that the Courts are prepared to intervene where the Crown had acted dishonourably and contrary to its constitutional obligations to First Nations. However, in the absence of such conduct, the parties to modern treaties cannot rely on the Courts to rescue them from a lack of diligence during the treaty negotiation and implementation process.