On December 1, 2017, the Supreme Court of Canada (SCC) issued its decision in First Nation of Nacho Nyak Dun v. Yukon,[i] concerning a contested land use planning decision of the Yukon Government under the Yukon Umbrella Final Agreement. The case is one of only a few by the SCC to substantively address modern treaties,[ii] and thus provides helpful commentary with respect to the principles governing the interpretation of modern treaties, the role of the courts in resolving modern treaty disputes, and the scope of the appropriate remedy where government has breached its treaty obligations.

Background

Following decades of negotiation, in 1990 the Yukon and federal governments and 14 Yukon First Nations finalized the Umbrella Final Agreement, which set the groundwork for concluding modern treaties in the Yukon and established a collaborative land use planning process. This led to several modern land claims agreements, including Final Agreements with the First Nation of Nacho Nyak Dun, Tr’ondëk Hwëch’in, and Vuntut Gwitchin First Nation (as well as a Yukon Transboundary Agreement executed by the Gwich’in Tribal Council on behalf of the Tetlit Gwich’in) (the Final Agreements). These agreements recognized the traditional territories of the affected First Nations and their right to participate in the management of public resources in the Peel Watershed in northern Yukon. The Peel Watershed is one of the largest intact wilderness watersheds in North America.

Yukon and the affected First Nations commenced the process set out in the Final Agreements to develop a regional land use plan for the Peel Watershed. In 2004, the parties agreed to the establishment of an independent Peel Watershed Planning Commission (Commission) to develop the land use plan. Following intensive consultation, the Commission submitted a Recommended Plan to Yukon and the First Nations in 2009.

After completing a first round of consultation with the affected First Nations, Yukon was required under the Final Agreements to approve, reject, or propose modifications to the Recommended Plan. Yukon’s written response to the Commission included certain statements expressing interest in increasing options for access and development. The Commission determined that those comments were not sufficiently detailed to constituted “proposed modifications”, but were merely expressions of general desires. Accordingly, these points were not considered in the development of the Commission’s Final Recommendation Plan, released in 2011.

In 2012, Yukon announced it would “modify” the Final Recommended Plan. Following a second round of consultation (which, contrary to a letter of understanding signed by Yukon, was carried out without the coordinated involvement of the First Nations), Yukon approved its own revised land use plan. The plan made substantial changes to the Commission’s Final Recommended Plan, allowing for increased development and access to the region. The First Nations objected to Yukon’s approval of its plan, considering it inconsistent with the process set out in the Final Agreements.

Decisions Below

The trial judge held that Yukon did not act in conformity with the process set out in the Final Agreements, and with inadequate consultation, had invalidly modified the Final Recommended Plan. The judge ordered Yukon to re-conduct its second consultation and to then either approve or modify the Final Recommended Plan based on the modifications it had previously proposed.

The Court of Appeal allowed Yukon’s appeal in part. It set aside the trial judge’s order returning the parties to the second round of consultation, instead directing the parties to return to the earlier first stage of consultation after finding that Yukon had failed to properly exercise its right to propose modifications to the Commission’s Recommended Plan at that earlier stage.

SCC Decision

On appeal, the First Nations submitted that Yukon’s authority to “modify” the Final Recommended Plan under the Final Agreement was restricted to modifications that it had previously proposed to the Recommended Plan. Accordingly, the First Nations argued that the matter should be returned to the second stage of consultation, as the trial judge had ordered.

Yukon conceded that it had breached the Final Agreements, but agreed with the Court of Appeal that the appropriate remedy was to return the parties to the first stage of consultation. This approach would (conveniently) allow Yukon to propose additional modifications to the Recommended Plan that it had not previously raised.

The SCC held that Yukon’s extensive changes to the Final Recommended Plan did not respect the process set out in the Final Agreements and quashed Yukon’s approval of the plan. Overturning the Court of Appeal’s decision, the SCC sent the parties back to the second round of consultation. The SCC found it would be inappropriate to afford Yukon a second chance at earlier consultation, noting that it had failed to diligently advance its interests and exercise its rights in the initial round of consultation and must bear the consequences of that failure.

The appropriate role of the courts in resolving modern treaty disputes includes exercising judicial restraint

Emphasizing that modern treaties are intended to renew the relationship between Indigenous peoples and the Crown to one of equal partnership, the SCC stated that in the context of resolving modern treaty disputes, courts should generally “leave space for the parties to govern together and work out their differences”, and that “reconciliation often demands judicial forbearance”.[iii]

However, the SCC acknowledged that modern treaties enshrine constitutional rights that courts must safeguard, and that such judicial restraint “should not come at the expense of adequate scrutiny of Crown conduct to ensure constitutional compliance.”[iv]

Yukon’s changes to the plan were not authorized by the Final Agreements

The SCC agreed with the courts below that Yukon’s changes to the Final Recommended Plan did not respect the process set out in the Final Agreements, and that Yukon’s adoption of its plan was therefore invalid. The SCC interpreted the word “modify” as permitting Yukon to make changes to the Final Recommended Plan without altering its fundamental nature; it did not grant Yukon a right to modify the plan so significantly as to effectively reject it. The right to modify was also subject to the obligation to conduct prior consultation as described in the Final Agreements. Consultation was a key component of the approval process. In addition, the objectives of the land use plan approval process — including ensuring meaningful participation on the part of First Nations in land use management in their traditional territories, and fostering a “positive, mutually respectful, and long-term relationship between the parties to the Final Agreements”[v] — further limited the scope of permitted modifications. The SCC held that Yukon did not enjoy an unconstrained right to make “modifications” that effectively rewrote the plan at the end of the process, as such a right would render the process meaningless. Any modifications had to be “minor or partial changes” made in good faith that were consistent with constitutional principles such as the honour of the Crown.[vi]

In discussing the principles governing the interpretation of modern treaties, the SCC noted that because modern treaties are “meticulously negotiated by well-resourced parties”, courts must pay close attention to their terms.[vii] Further, specific terms must be read “in light of the treaty text as a whole and the treaty’s objectives”.[viii] The SCC stated that reconciliation is found in, among other things, “the respectful fulfillment of a modern treaty’s terms”,[ix] and that the honour of the Crown continues to be a central doctrine in this context.

The appropriate remedy was to return the parties to the second round of consultation, where the breach at issue occurred

The SCC quashed Yukon’s approval of its plan. The remaining question was whether the parties should be returned to the first round of consultation, as the Court of Appeal had ordered, or instead to the second round of consultation, as the trial judge had ordered.

The SCC found that the Court of Appeal had improperly inserted itself into the treaty relationship “by assessing the adequacy of Yukon’s conduct at the [earlier] stage of the land use plan approval process, even though the First Nations did not seek to have the approval quashed on that basis”.[x] The SCC commented:

In my view, the Court of Appeal’s approach is inconsistent with the appropriate role of courts in a judicial review involving a modern treaty dispute. The court’s role is not to assess the adequacy of each party’s compliance at each stage of a modern treaty process. Rather, it is to determine whether the challenged decision was legal, and to quash it if it is not. Close judicial management of the implementation of modern treaties may undermine the meaningful dialogue and long-term relationship that these treaties are designed to foster. Judicial restraint leaves space for the parties to work out their understanding of a process — quite literally, to reconcile — without the court’s management of that process beyond what is necessary to resolve the specific dispute.[xi]

The SCC also observed that the effect of the Court of Appeal’s decision was to give Yukon another opportunity to propose access and development modifications to the Recommended Plan. The SCC found it would be inappropriate to afford Yukon this second chance, noting that it had failed to diligently advance its interests and exercise its rights in the first round of consultation, and that it must bear the consequences of that failure.

The SCC concluded that the appropriate remedy was to quash Yukon’s approval of its plan and return the parties to the second round of consultation, meaning that Yukon would not have a second opportunity to propose access and development modifications to the Recommended Plan.

The Takeaways

First Nation of Nacho Nyak Dun confirms that while “judicial restraint” are the buzzwords when it comes to the appropriate approach of the courts in resolving modern treaty disputes, the courts continue to play an important role in safeguarding the constitutional rights enshrined in modern treaties.

The decision provides a reminder to federal, provincial, and territorial governments that treaties are constitutionally protected documents to which the standards of the honour of the Crown apply, and of the importance of respecting the processes set out in modern treaties with First Nations – should government fail to do so, it must bear the consequences.