Commentary: The Keewatin decision – A sea change in provincial control of natural resources?

An Ontario Superior Court, in Keewatin v. Ontario, has cast doubt on the validity of provincial forestry licenses in the Treaty 3 area of northwestern Ontario, which includes the Red Lake gold camp. Mining could also be at risk of litigation in the same or similar treaty areas.

The court ruled that Ontario cannot authorize land uses that would interfere with Treaty 3 hunting and fishing rights – without the approval of the federal government that negotiated the treaty.

The decision has been hailed as a major victory for First Nations. It also changes Ontario’s understanding of its jurisdiction over provincial natural resources.

The Grassy Narrows First Nation challenged clear-cutting licenses given to Abitibi Consolidated, now AbitibiBowater. In 2008 the company suspended operations in the Whiskey Jack Forest.

The court’s decision focused on two points.

First, Treaty 3 says that lands may only “be required or taken up for settlement, mining, lumbering or other purposes by Her said Government of the Dominion of Canada” – not the government of Ontario.

The treaty was concluded in 1873, and the territory in question was transferred to the province by the federal Boundary Extension Act of 1912.

Second, under the Constitution Act of 1867, the federal Parliament has exclusive jurisdiction with respect to “Indians, and lands reserved for the Indians.” Provincial control over natural resources is subject to an exception – “any Interest other than that of the Province” – which is held to include First Nation treaty interests.

The decision is expected to be appealed.

There is now a substantial framework of Supreme Court of Canada decisions on First Nation rights.

Section 35 of the Constitution Act of 1982 recognizes and affirms existing aboriginal and treaty rights.

In a dozen leading cases, the Supreme Court of Canada has stressed that “what section 35(1) does is provide the constitutional framework through which the fact that aboriginals lived on the land in distinctive societies, with their own practices, traditions and cultures, is acknowledged and reconciled with the sovereignty of the Crown.”

In our federal system, Crown sovereignty is shared between federal and provincial jurisdictions.

However, the constitutional requirements to respect aboriginal and treaty rights are identical for both levels of government. The standards for consultation and accommodation are the same.

If the priority is respect for treaty rights, it seems more practical for the province, whose land and natural resources these otherwise are, to be responsible for “upholding the honour of the Crown,” in the language of the Supreme Court of Canada.

It is likely the federal government would not welcome treaty responsibilities over provincial Crown lands and natural resources.

Apart from an appeal, the federal and Ontario governments could consider legislation. For example, inter-delegation statutes in 1924 and again in 1986 resolved federal-provincial issues arising from court decisions on Indian reserve mineral royalties in Ontario.

One other Ontario Treaty, No. 5, contains the reference to the “Dominion Government” regarding taking lands for mining, lumbering or other purposes. Both Treaty 3 and Treaty 5 territories cross the Manitoba-Ontario border. However, in Manitoba, as in Alberta and Saskatchewan, Natural Resource Transfer Agreements, enacted in 1930, address First Nation hunting and fishing rights in those provinces.

In contrast, Treaty No. 9, covering most of northern Ontario, does not contain the reference to the Dominion Government. The treaty text itself, however, would be supplemented by other historical evidence in the event of litigation.

The Keewatin decision places a cloud over resource development and land uses across northern Ontario.

The ruling may prompt other aggrieved First Nations to consider similar litigation.

It is important that uncertainties surrounding the decision be clarified. Authoritative guidance is needed by a wide range of stakeholders.

It is not only resource development proponents that may be affected. More than 85 agreements have been concluded in Ontario to provide mining development benefits to aboriginal communities. Grassy Narrows itself concluded a 2006 Kenora quarries agreement with Nelson Granite.

In addition, Grassy Narrows First Nation has been engaged in discussions with Ontario’s Ministry of Natural Resources. Two memoranda of understanding have been signed, one in 2008, and a second in April 2011, before the court decision was released on Aug. 16, 2011. The court hearings had concluded on May 3, 2010.

– Based in Toronto, Kenning Marchant, LL.B., LL.M., D.Jur., provides strategic legal support to Canadian mining, energy, forestry, and transportation sectors relating to Aboriginal issues For more details, please visit www.themarchantpractice.ca.