Supreme Court of Canada Affirms Modern Treaties Must Be Honoured
On December 1, 2017, the Supreme Court of Canada (“SCC”) released First Nation of Nacho Nyak Dun v Yukon, 2017 SCC 58 [Yukon], an important decision concerning the interpretation of modern treaties and, in particular, the Crown’s obligations in land use planning processes established by Yukon Final Agreements. Although this case does not change the existing law on modern treaty interpretation, it serves as a much-needed reminder of the importance of acting in good faith and in accordance with the Honour of the Crown when dealing with First Nations treaty rights.
In this article, I will begin by summarizing the factual background of Yukon and the decisions of the Yukon Supreme Court (“YSC”) and the Yukon Court of Appeal (“YCA”). I will then detail the SCC’s decision, focusing on the implications of the Yukon decision, including modern treaty interpretation principles, the role of courts in enforcing modern treaties, and the importance of meaningful collaboration and consultation in modern treaties.
Yukon is home to nearly half of Canada’s modern treaties. Yukon’s modern treaties (“Final Agreements”) are based on the Umbrella Final Agreement (“UFA”) between Canada, Yukon, and First Nations, which set the stage for the modern treaty making process in the Yukon and established a collaborative regional land use planning process. The Final Agreements recognized the right for First Nations to meaningfully participate in the management of public resources in land use beyond their settlement lands across the whole of their traditional territories.
Pursuant to these Final Agreements, the Peel Watershed Planning Commission (the “Commission”) was established in 2004 to develop a regional land use plan for Peel Watershed, an intact and rich ecosystem spanning almost 68,000 square kilometers in northern Yukon. The Commission was established by the voluntary agreement of the Yukon government and the affected First Nations, and members of the Commission were jointly nominated by Yukon and First Nations. In 2009, after more than four years of intensive and broad stakeholder, expert, and public consultations, the Commission submitted a Recommended Plan that suggested 80% of the Peel Watershed be protected and 20% be open for mineral exploration.
At this stage the Yukon government had the obligation to consult with the affected First Nations and then approve, reject, or propose modifications with the Recommended Plan as it applied to non-settlement land. First Nations had the same obligation for settlement land. In fact, shortly thereafter, the Yukon government and First Nations signed a Joint Letter of Understanding (“LOU”) in which they agreed to “establish a coordinated response to the Recommended Plan, to conduct joint community consultation, and to endeavour to achieve consensus on the plan.”
However, despite this mutual agreement, the Yukon government proposed and approved a different land use plan for the non-settlement lands, making substantial changes to increase development and access to land in the region. Under its proposed “modifications”, 71% of the Peel Watershed would be open to mineral exploration and 29% would be protected. Yukon argued that it and First Nations each had “ultimate authority” to approve, reject, or modify the part of the Final Recommended Plan that applied to land under their authority: they had authority over the non-settlement lands and their changes were modifications to the Final Recommended Plan. The First Nations brought legal proceedings against the Yukon government seeking a declaration that Yukon did not properly conduct the second consultation it was required to under the Final Agreement, orders to quash its plan, and directing it to re-conduct the second consultation.
At trial, 2014 YKSC 69, Justice Veale concluded that the process followed by the Yukon government “did not respect the planning process” and Yukon’s interpretation of the Final Agreement and the consultation process was “impermissibly flawed.” He held that by introducing “modifications” that had not been presented to the Commission, Yukon had “effectively usurped the planning process and the role of the Commission.”
Justice Veale quashed the Final Recommended Plan and ordered Yukon to re-conduct its consultation process. He also held that the Yukon government could only approve or modify the Final Recommendation Plan, but not reject it because it did not raise sufficient modifications or grounds for rejection on the earlier Recommended Plan.
On appeal, 2015 YKCA 18, the YCA upheld the trial judge’s decision to quash the Final Recommended Plan, but instead of ordering Yukon to re-conduct its consultation process again, ordered that the matter be remitted back even further along the process where the Yukon Government could remedy its failure to propose modifications or suggest grounds for rejection.
At the SCC
Justice Karakatsanis delivered the unanimous judgment of the SCC. He reiterated that the object of the UFA, and modern treaties made under its framework, was to ensure First Nations could meaningful participate in the management of public resources and land in their traditional territories. An unconstrained authority for the Yukon government to modify the Final Recommended Plan at its very last stages would render reconciliation and this process meaningless as it would provide the Yukon government with free rein to essentially rewrite the Final Recommended Plan at the end.
Justice Karakatsanis agreed with the YSC and YCA that the Yukon government did not have the authority to make extensive substantial changes to the Final Recommended Plan, although the Yukon government was permitted to make “minor or partial” modifications.
In my view, s. 184.108.40.206 of the Final Agreements authorizes Yukon to make modifications to a Final Recommended Plan that (1) are based on those it proposed earlier in the process or (2) respond to changing circumstances. As modifications are, by definition, minor or partial changes, s. 220.127.116.11 does not authorize Yukon to change the Final Recommended Plan so significantly as to effectively reject it. In all cases, Yukon can only depart from positions it has taken earlier in the process in good faith and in accordance with the honour of the Crown. (Yukon, para 5)
Thus, the SCC agreed with the YSC and YCA and upheld the order to quash the Final Recommended Plan. The SCC, however, disagreed with the YSC and YCA on what stage of the process should return to. While the SCC quashed the Final Recommended Plan, it found that the effect of quashing the approval was to return the parties to the stage in the land use planning approval process where the Yukon government could “approve, reject, or modify” the Final Recommended Plan after consultation. Contrary to the YSC, the Yukon government was not bound to only approve or modify, and contrary to the YCA the parties were not returned to an earlier stage in the process where they would have much broader discretion.
Although Yukon does not revolutionize the existing law on modern treaty interpretation, the SCC clarifies and reiterates modern treaty interpretation principles, the role of courts in enforcing modern treaties, and the importance of meaningful collaboration and consultation in modern treaties, general principles that are particularly relevant given their applicability to other modern treaties and government contractual agreements with First Nations.
Modern Treaty Interpretation Principles
The SCC reiterates principles from Quebec (Attorney General) v Moses, 2010 SCC 17, and Beckman v Little Salmon/Carmacks First Nation, 2010 SCC 53, that the terms of modern treaties should be interpreted “in light of the treaty text as a whole and treaty’s objectives” (Yukon, headnote). A modern treaty should not be interpreted “in an ungenerous manner or as if it were an everyday commercial contract”; the purpose of modern treaties is to advance reconciliation, and reconciliation is found in the respectful fulfillment of modern treaty terms (Yukon, para 37 citing Little Salmon, para 10). However, this does not necessarily imply a narrow textual interpretation. The SCC emphasizes that while courts should respect the handiwork of parties to a modern treaty, this is always subject to constitutional limitations as the Honour of the Crown.
Role of Courts in Enforcing Modern Treaties
In Yukon, Justice Karakatsanis rebukes the YCA for delving too deeply into the relationship between the Yukon government and First Nations when it overturned the trial decision.
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. By assessing the adequacy of Yukon’s conduct at the s. 11.6.2 stage of the land use plan approval process, even though the First Nations did not seek to have the approval quashed on that basis, the Court of Appeal improperly inserted itself into the heart of the ongoing treaty relationship between Yukon and the First Nations. (Yukon, para 60)
Throughout the judgment, Justice Karakatsanis repeats that reconciliation often demands judicial forbearance and emphasises that because modern treaties are intended to renew the relationship between First Nations and the Crown to one of an equal partnership, courts should allow the parties to govern together and work out their differences.
The SCC has long stated that reconciliation is not achieved through litigation in the courtroom, but is the product of negotiation, dialogue, and treaty (See Delgamuukw v British Columbia,  3 SCR 1010; Haida Nation v British Columbia (Minister of Forests), 2004 SCC 73; Manitoba Metis Federation Inc v Canada (Attorney General), 2013 SCC 14). Although it may seem that by using the strong language of “judicial forbearance,” the SCC has further narrowed the role of courts in modern treaty disputes, it is cautious in noting that judicial forbearance does not come at the expense of “adequate scrutiny of Crown conduct to ensure constitutional compliance” (Yukon, headnote). The SCC seems to have moved towards an approach of non-interference in modern treaty disputes, but has left the door open to intervene if warranted.
Meaningful Collaboration and Consultation in Modern Treaties
Consultation is a key component in the approval process. In Yukon, the UFA and Final Agreements both set out detailed consultation requirements, including providing adequate detailed notice, a reasonable consultation period and an opportunity to present views, with a full and fair consideration of the views presented in the consultation. In fact, Yukon’s Chief Land Claims Negotiator, Barry Stuart, even acknowledged that “it was more important to First Nations that they be able to meaningfully participate in land use management in all of their traditional territory than to acquire vast tracts of their traditional territory as settlement lands” (Yukon, para 46). If there was any doubt of the importance of meaningful consultation, the SCC cleared it in Yukon by reiterating that consultations should “foster a positive, mutually respectful, and long-term relationship between the parties to the Final Agreements” (Yukon, para 10). Consultation is not a mere procedural requirement, it has substantive implications and the Crown must participate in collaborative and meaningful consultation.
Yukon serves as a reminder of the Crown’s important substantive constitutional and contractual obligations. While the case itself does not change the existing law on modern treaty interpretation, it serves as an important caution to the Crown. Although courts will not supervise the conduct of the Crown under modern treaties allowing the Crown and First Nations to forge a renewed relationship and foster reconciliation, if the Crown attempts to or runs roughshod over First Nations rights, courts will intervene. This case gives voice to that principle.