Earlier this week, the Court of Appeal released its decision in Keewatin v. Ontario (Natural Resources)[1]. The Court allowed the appeal finding that the trial judge’s central findings and conclusions were in error and cannot stand. While the decision deals with forestry, the issues raised have equal import to mining, pipelines and other resource sectors that hold tenures to use treaty lands.

The fundamental issue in Keewatin is the ability of Ontario to “take up” tracts of land for forestry within certain lands (the “Keewatin Lands”) subject to Treaty 3[2] and thereby limit the Ojibway Indian’s right to hunt and fish under the Treaty. The trial judge found that Ontario could not take up land within the Keewatin Lands so as to limit harvesting rights without obtaining Canada’s approval. The Court of Appeal disagreed.

The impetus for the action by Grassy Narrows First Nation (“Grassy Narrows”) was a sustainable forest licence issued by the Minister of Natural Resources to Abitibi-Consolidated Inc. (“Abitibi”). This licence entitled Abitibi to engage in clear-cutting forestry operations within the Keewatin Lands. Grassy Narrows alleged, among other things, that Abitibi’s operations violated Grassy Narrow’s harvesting rights under Treaty 3[3]. At trial, the parties advanced extensive historical and other evidence and addressed various complex legal and constitutional issues.

The principal issue before the trial court, and on appeal, is the interpretation of the harvesting clause in Treaty 3, including the constitutional implications. The Treaty 3 harvesting clause provides as follows:

Her Majesty further agrees with Her said Indians that they the said Indians, shall have [the] right to pursue their avocations of hunting and fishing throughout the tract surrendered as hereinbefore described subject to such regulations as may from time to time be made by Her Government of Her Dominion of Canada, and 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 duly authorized therefor by the said Government. (emphasis added)

The trial judge found that Canada must approve any “taking up” by Ontario. The Court of Appeal disagreed.

The Court of Appeal analysed the constitutional framework within which the harvesting clause must be interpreted as comprising three components namely, (a) subsection 91(24) of the Constitution Act which gives Canada exclusive legislative authority over “Indians and lands reserved for the Indians”, (b) section 109 of the Constitution Act which grants Ontario beneficial ownership of Crown lands within its borders subject to, among other things, existing Aboriginal interests, and (c) subsection 92(5) of the Constitution Act that provides Ontario with the exclusive legislative power to manage and sell public lands belonging to the province and to make laws respecting non-renewable natural resources, forestry resources and electrical energy.

Although the Treaty was negotiated by Canada, the appeal court held that in 1912 Ontario stepped into Canada’s shoes. As such, the province became empowered to take up lands. At paragraph 135, the Court of Appeal states as follows:

The Ojibway’s Treaty partner is the Crown, not Canada. Canada is not a party to the Treaty. The Treaty promises are made by the Crown, not by a particular level of government. The Ojibway may look to the Crown to keep the Treaty promises, but they must do so within the framework of the division of powers under the Constitution.

The Court of Appeal made it clear that its interpretation of the Treaty 3 harvesting clause in no way compromises the Ojibway’s harvesting rights. Ontario, as the beneficial owner of the Keewatin Lands, remains responsible for ensuring that its actions are consistent with the Crown’s promises embodied in the Treaty.

The Supreme Court of Canada decision in Mikisew[4] addressed the Crown’s duty to consult respecting treaty harvesting rights. The Honour of the Crown requires consultation when government action or conduct may adversely affect Aboriginal peoples’ harvesting or other treaty or Aboriginal rights. The scope of the consultation, namely information sharing and good faith attempts to minimize or mitigate any adverse effects, varies depending on the strength of the asserted treaty right and the extent of the impact[5]. The Court of Appeal confirmed that Ontario must satisfy this consultation obligation when it takes up lands within the Keewatin Lands. Contrary to the trial judge’s decision, the province’s authority, and concomitant responsibility, is not subject to federal supervision.

The Court was urged by the First Nation interveners to limit the scope of its decision to the Keewatin Lands. The Court declined to do so finding that its conclusions applied to all of the Treaty 3 lands within Ontario’s boundaries.

When the trial judge’s decision was released, there was understandable concern that similar actions would be brought respecting other numbered treaties in Ontario and across Canada. The lower court decision also created the risk that challenges would be made to the validity of existing mining and timber leases and licences granted by Ontario, for which there could be significant fallout[6].

The trial court ruling introduced a considerable level of uncertainty in terms of the constitutional straitjacket apparently imposed on the province and the implications for forest, mining and other licences and leases within treaty lands. In essence, the Court of Appeal has restored the status quo. In Ontario, the Court of Appeal decision will provide particular relief to companies developing projects in western Ontario and in the important “Ring of Fire”[7].