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Legal Update

Grassy Narrows: A sea change in provincial control of natural resources

Kenning Marchant, D.Jur.
The Marchant Practice LegalUpdate

An Ontario Superior Court decision, Keewatin v. Ontario, has cast doubt on the validity of forestry licenses in the Treaty 3 area of northwestern Ontario. Mining permits and leases , and land use allocations for hydro development, transportation corridors, tourism, cottages or provincial parks, could be at risk of future litigation in the same or similar treaty areas.

The Court ruled that Ontario cannot take up lands under Treaty No. 3 "for settlement, mining, lumbering or other purposes" that would interfere with First Nation 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 treaty rights. It also changes Ontario's understanding of its jurisdiction over provincial Crown land and natural resources.

First Nation trappers went to court on behalf of all members of the Grassy Narrows First Nation against clear-cutting forestry licenses in favour of Abitibi Consolidated Inc., now AbitibiBowater Inc. In 2008 the company suspended forestry operations in the Whiskey Jack Forest

in Grassy Narrows' traditional territory. The Court's decision focused on 2 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. The territory in question was transferred to the province by the federal Ontario Boundary Extension Act of 1912.

Second, under the Constitution Act, 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, 1982 recognizes and affirms existing aboriginal and treaty rights.

In a dozen leading cases, the Supreme Court of Canada has stressed that "what s. 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 2 jurisdictions, federal and provincial.

However, the constitutional requirements to respect aboriginal and treaty rights are identical for both levels of government. The standards for consultation and accommodation of treaty rights do not vary by level of government.

If the priority is respect for treaty rights in natural resource development, it is likely to be more practical for the Province, whose land and natural resources these otherwise are, to be responsible for addressing them – 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 rights responsibilities over provincial Crown lands and natural resources.

Apart from an appeal, the federal and Ontario governments could also pursue legislative approaches. For example, inter-delegation legislation 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" in connection with taking lands for mining, lumbering or other purposes. Both Treaty No. 3 and Treaty No. 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 specific reference to the Dominion Government. The treaty text itself, however, would likely be supplemented by other historical evidence in the event of litigation.

The Ontario Superior Court decision in Grassy Narrows places a cloud over resource development and land uses across northern Ontario.

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

It is important that uncertainties surrounding the Grassy Narrows 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 100 aboriginal-industry agreements have been concluded in Ontario to provide development benefits to aboriginal communities.

These include the 2010 agreement for the Mitoog Limited Partnership to manage forestry operations in another Treaty 3 area, the Kenora Forest. Treaty 3 Wabaseemoong (Whitedog), Dalles and Whitefish Bay First Nations are partners in Mitoog LP with forestry companies .

In addition, Grassy Narrows First Nation has been engaged in discussions with the Ontario 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 August 16, 2011. The court hearings had concluded on May 3, 2010. August 24, 2011

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