Two recent cases provide insight into the interpretation of Treaty Land Entitlement Agreements (“TLE Agreements“) as well as create some uncertainty about whether the Federal Court has exclusive jurisdiction over actions involving the interpretation of the TLE Agreements: Saskatchewan v. Muskoday, 2016 SKQB 73 (“Muskoday“), and Saskatchewan v Pasqua (2016 FCA 133) (“Pasqua“).

The Muskoday First Nation (“MFN”) attempted to purchase 30,000 acres of Crown lands and minerals from Saskatchewan, as per its TLE Agreement, which included lands on which an exploration stage mining project in the Fort à la Corne Provincial Forest was located. Saskatchewan declined to sell the land and minerals to the MFN, citing a variety of reasons:

  1. The minerals would benefit the province as a whole;
  2. The lands where undergoing advanced exploration for diamonds;
  3. There is an absence of comprehensive federal regulation for on-reserve mineral exploration. It is well known that regulatory uncertainty negatively impacts the ability of exploration companies to secure funding; and
  4. Lack of a royalty regime whereby the diamonds can be appropriately valued for a TLE sale.

The MFN brought an action against the province in the Saskatchewan Court of Queen’s Bench. The Court found that the doctrine of the honour of the Crown arises in the implementation of the TLE Agreements. This means that the province must act with intellectual honesty, and avoid the appearance of sharp dealings. However, the Court also found that the honour of the Crown does not obligate the province to agree to every TLE purchase request.

The Court clarified that the term “favourable consideration” contained in the TLE Agreements, should be interpreted as “thorough deliberation in good faith.” The requirement to give “favourable consideration, however, does not prevent Saskatchewan from considering public interest matters”, as it has a duty to the public. The Court ultimately found that Saskatchewan’s reasons for denying the purchase request from the First Nation were reasonable.

In the Pasqua case, the Pasqua First Nation (“PFN”) sued the province in Federal Court for its refusal to sell specific Crown lands and minerals to PFN and for its failure to consult on the sale of a mineral lease to a third party. Saskatchewan argued that the Federal Court had no jurisdiction over the province and applied to have the action struck. The Federal Court denied the province’s motion, and the province’s appeal was dismissed in part by the Federal Court of Appeal in Saskatchewan v. Pasqua, 2016 FCA 133.

The Federal Court of Appeal found that a clause in the PFN TLE Agreement which provides that the Federal Court has exclusive original jurisdiction over the interpretation of the provisions of the TLE Agreement was sufficient to provide the Federal Court exclusive jurisdiction over the dispute. The Court of Appeal, however, found that the Federal Court did not have jurisdiction over parts of PFN’s claim alleging Saskatchewan breached its duty to consult PFN.

The Federal Court of Appeal finding that it has exclusive jurisdiction over disputes related to interpretation of the TLE Agreements is at odds with cases like Muskoday and others where the Court of Queen’s Bench has assumed jurisdiction over actions involving the interpretation of TLE Agreements.