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­­Implementation of Modern Treaties: First Nation of Nacho Nyak Dun v. Yukon

On Friday, December 1, the Supreme Court of Canada released its decision in the Peel River case that we first reported on here and here. The decision deals with the obligations of the Yukon Government to follow the land use planning process set out in modern land claim agreements with First Nations in Yukon, more specifically the development of a land use plan for the Peel River watershed. However, while the decision arises from a land use planning regime unique to Yukon, the decision will have implications for how governments and courts approach interpretation and application of obligations under modern treaties across Canada. By extension, the decision will have implications for resource developers in parts of Canada that are covered by modern treaties.

Background

As set out in more detail in our previous posts, this case involved the interpretation of provisions in modern treaties (called final agreements) between three Yukon First Nations, Canada and the Yukon Government. Those final agreements contain provisions setting out a process for collaborative development of land use plans within the First Nations’ traditional territories. The process allows the parties to create an independent land use planning commission to develop an initial recommended plan for approval by the Yukon government (for territorial lands) and by the First Nations (for their settlement lands). The process requires the Yukon government to consult on that plan before approving, rejecting, or proposing modifications to it (section 11.6.2 of the Final Agreement). In response to Yukon’s decision at that stage, the Commission was then required to reconsider as necessary and propose a Final Recommended Plan, followed by another obligation on Yukon to consult on that plan before final approval, rejection or modification by Yukon (section 11.6.3.2 of the Final Agreement).

In this case, Yukon provided very general requested changes to the initial recommended plan developed by the Commission.  When the Final Recommended Plan was submitted by the Commission, the Yukon government then proposed substantial modifications. The trial judge found that to be “an ungenerous interpretation not consistent with the honour and integrity of the Crown”, and not only remitted the process back to the 11.6.3.2 stage, but ordered Yukon, after it conducted the ordered consultation, to either approve the Final Recommended Plan, or modify it based on the modifications it had proposed to the initial recommended plan. In other words, in the trial judge’s view it was not open to the Yukon government to reject the Final Recommended Plan.

The Court of Appeal agreed with the trial judge that Yukon had run afoul of its obligations under the treaties, but imposed a significantly different remedy. The Court of Appeal ordered that the parties return to the 11.6.2 stage, which would effectively have given Yukon an opportunity to propose more extensive changes to the recommended plan, as opposed to limited modifications to the Final Recommended Plan. In many ways, for the Yukon First Nations this was “winning the battle but losing the war”, and they appealed to the Supreme Court of Canada.

Before the Supreme Court, the Yukon government did not contest that it had not complied with the process set out in the final agreements. However, at issue was whether the land use planning process should be sent back to an earlier stage in the process, or to the final stage where the Yukon government’s options were limited to approving, modifying or rejecting the Final Recommended Plan.  

This was more than an academic dispute about processes. The Final Recommended Plan had proposed significant limits to resource development activities in the Peel River region, focussing instead on conservation priorities. The Yukon government wished to override those recommended limits through the extensive changes it proposed to the Final Recommended Plan.  If the planning process was only sent back to the final stage, the Yukon government’s ability to make those changes would be more limited. 

Decision

The Supreme Court overturned the Court of Appeal’s decision and reinstated part of the trial judge’s ruling, which was to return the parties to the point in the process where Yukon was only able to either approve, reject or modify the Final Recommended Plan.  Unlike the Court of Appeal, the Supreme Court did not send the parties back to an earlier stage in the process, which would have effectively allowed Yukon an opportunity to “backfill” and introduce modifications that it previously failed to make.  Rather, the Court returned the parties to the position they were in after the Commission issued the Final Recommended Plan, significantly narrowing the range of modifications Yukon would be allowed to make to the plan. The Court stated:

[61] … Yukon must bear the consequences of its failure to diligently advance its interests and exercise its right to propose access and development modifications to the Recommended Plan. It cannot use these proceedings to obtain another opportunity to exercise a right it chose not to exercise at the appropriate time. 

In making its decision, the Court underscored that courts should not go further than they need to in resolving a dispute regarding an alleged breach of a modern land claims agreement. The Court was clearly concerned that the Court of Appeal had inserted itself into the ongoing treaty relationship by returning the parties to an earlier stage of the land use planning process. In a similar vein, the Court was concerned that the trial judge had also gone further than needed by ordering that Yukon must either accept or modify the Final Recommended Plan based on recommendations it had previously proposed. Rather, the Court simply returned the parties to the stage they were at, without constraining the Yukon government’s decision beyond what was required by the treaty. In doing so, the Court clarified that the Yukon government was not necessarily limited to recommendations it had previously proposed and that it could make minor amendments based on changing circumstances, but it could not do as it had done earlier and effectively propose a brand new plan at this stage of the process.

Implications

As with the lower court decisions, the Supreme Court of Canada’s decision confirms that the Yukon government has the ultimate power to make decisions regarding the management and use of its territorial lands. However, that power is not unfettered. The decision also reminds governments — and by extension resource developers relying on authorizations given by governments — that treaty rights contained in modern land claim agreements are to be given a large and liberal interpretation consistent with the objectives of the treaty and in a manner that upholds the honour of the Crown. This includes commitments governments have made about processes for consideration of Indigenous interests in making decisions about Crown lands. In particular, the decision sends a message to governments that where a land use planning process is set out by a treaty, governments must follow that process in good faith from the outset – they will not be allowed to backfill where they fail to raise issues at the outset.  

Because this case deals with the unique wording of the land use planning provisions of the Yukon treaties, its direct impact outside the Yukon may be limited.  Nevertheless, there are broader implications.

First, the decision emphasizes the Court’s view that reconciliation is achieved not only by negotiating modern treaties, but in how they are implemented. At one time the conclusion of modern treaties alone was seen as a way for governments to achieve finality and certainty as to the extent of Indigenous rights and the scope of government responsibilities to Indigenous groups. Now conclusion of treaties is only one step in the process of reconciliation, which continues into the treaty implementation phase.

Second, while the Court states that “reconciliation often demands judicial forbearance” and that “[i]n resolving disputes that arise under modern treaties, courts should generally leave space for the parties to govern together and to work out their differences”, at the same time “courts play a critical role in safeguarding the rights” that modern treaties, as constitutional documents, provide.  Courts will still supervise Crown conduct in the implementation of modern treaties, and can strike down government decisions not consistent with the honour of the Crown. It remains to be seen whether this approach will result in the meaningful dialogue and reconciliation that the Court no doubt wishes to encourage, or whether this approach will result in parties landing back in Court every time a further snag in the treaty implementation process is encountered. 

Third, for resource developers — particularly in the North where many modern treaties have been entered into —  the message remains as before that modern treaties define and constrain the processes that governments must follow in making decisions about Crown lands and resources. Resource developers must therefore pay close attention to obligations arising under modern treaties that apply in areas where a project is proposed and should independently consider whether government regulatory decisions are being made in a manner that respects the terms of the treaties and the honour of the Crown. If proper processes are not being observed, then it is possible, as in this case, that the resulting decision may be quashed.

For more information, please contact John Olynyk at jolynyk@lawsonlundell.com,  Keith Bergner at kbergner@lawsonlundell.comToby Kruger at tkruger@lawsonlundell.com or a member of our Indigenous Law group

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Lawson Lundell's Project Law Blog focuses on updating proponents on issues emerging in the law and policy that applies to the development of major projects in Canada. The focus of the blog is on matters relating to environmental assessment and compliance, regulatory matters and Indigenous consultation.

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