(Note to reader. For a greater and easier understanding of the Court of Appeal decision in Restoule the reader is invited to first read my “1850 Treaties decision article”, my article dated January 2nd, 2019 on the precedent-making Restoule trial decision.)
Background to the Court of Appeal Decision
In 1850 the 21 Ontario Indian bands along the north shores of Lakes Huron and Superior, by the terms of the Robinson Treaties, surrendered and ceded to the Crown all their claims to ownership of the Treaties territories in exchange for monies paid and to be payable in future, the establishment of reserves and the retention of the right to hunt, fish and gather on the surrendered and ceded lands.
There was a one-time, “signing bonus”-type cash payment of 2000 pounds paid to each of the Superior and Huron groups of bands. In addition, the Treaties promised the fixed, “further perpetual annuity” of 500 pounds to the Superior bands and the fixed, “further perpetual annuity” of 600 pounds to the Huron bands, “the same to be paid and delivered to the said Chiefs and their Tribes at a convenient season of each summer.” (The Huron bands perpetual annuity was greater because their population was greater.) These annuities are hereinafter sometimes referred as the “collective lump sum annuities.”
The Treaties contained a provision called by all “the augmentation clause” whereby the collective lump sum annuities could, at the discretion of the Crown, be augmented- in other words increased. The relevant wording of the discretionary augmentation clause is as follows:
“…in case the territory hereby ceded …shall at any future period produce an amount which will enable the Government of this Province, without incurring loss, to increase the annuity hereby secured to them, then and in that case the same shall be augmented from time to time, provided that the amount paid to each individual shall not exceed the sum of one pound Provincial currency in any one year, or such further sum as Her Majesty may be graciously pleased to order….”
In 1875 the “one-pound Provincial currency” was increased to $4 per year, which it has remained at to the present day. Her Majesty has never been “graciously pleased” to increase it.
For about 150 years following the signing of the treaties all Treaties signatories, by their words and behaviour, demonstrated that their common intention and understanding as to what payments the Treaties called for, was that there was to be paid every year one collective lump sum annuity to each of the Superior and Huron band groups, with each lump sum annuity perpetually fixed in the aforesaid stated amounts, (500 pounds and 600 pounds), with the method of payment being direct individual payments of $4 to each individual Treaties beneficiary. In the Crown’s sole discretion, the lump sum amounts could be increased if economic conditions warranted. But the maximum increase would be “capped” at $4 per Treaty beneficiary, or, as stated, increased to “such further sum as Her Majesty may be graciously pleased to order.” Again, the capped amount would be paid in the form of direct, individual payments to all Treaty beneficiaries, even if the population grew.
Significantly, it was agreed in the Treaties that the annuity could be proportionately reduced if the Indigenous Treaties population fell below two-thirds of what it was in 1850, (only 1240 persons in the Superior territories and only 1422 in the Huron territories.)
During this approximately 150-year post-Treaties period all parties acted as though they all believed that the Treaties called for there to be only one lump sum collective annuity, and that the manner of paying it out was to pay it out by individual payments to all individual Treaties beneficiaries at the maximum rate of $4 per year.
Many Northern Ontarians are aware of the annual Treaties payments ceremonies where a Crown agent showed up with a bag of toonies and distributed two toonies, (or sometimes a cheque for $4), to each Treaties beneficiary. At these Treaties payment ceremonies, no Chief ever demanded a second cheque for a second, separate sum in addition to his or her own $4 payment. The one $4 direct, individual payment to each individual Treaty beneficiary seemed to cover all that was legally owing in relation to the collective lump sum annuity.
The post-Treaties behavior showed that it was never the belief of the Treaties beneficiaries that the Treaties called for two annual payments: firstly, a payment payable to the “Chiefs and the Tribes” as a collective, and secondly, a separate, additional, individual payment payable to each Treaty beneficiary, (being the $4).
There was never a suggestion that the collective lump sum annuity was payable in two parts- the first part being the $4 individual, distributive payment and a second part payable to “the Chiefs and the Tribes”.
While on occasion over this period there were requests that the annual $4 individual payment be increased, there was never any demand or suggestion from any Treaties beneficiary that there was supposed to be a second, different payment payable to “the Chiefs and the Tribes”-separate and apart from the $4 annual payment- which had not been paid as required and was owing.
As stated, the Crown was never “graciously pleased” to increase the annual, individual $4 payment, preferring to honour its overall moral and legal duties to the Treaties beneficiaries by more conventional legislative and policy means. (See discussion of “the infrastructure and institutions that are built with Crown tax revenues”, below.)
Then, starting in the early 2000’s, the legal, social and political landscape began to change in this profound area of Canadian life. First Nations began to consistently win spectacular Court victories. The duty to consult and accommodate was invented in their favour by the Supreme Court. Most of British Columbia and other non-treaty parts of Canada were declared by the Supreme Court to be the subject of “aboriginal title.” The sovereign rights of our Crowns to be the sole maker of laws governing all Canadians were significantly diminished in favour of First Nations groups, who accordingly have become a de facto third fount of constitutional sovereignty.
The lie that the British and Canadian “colonial” dealings with the ancestors of present-day Indigenous Canadians constituted a form of “genocide” was given birth to and has been shamefully allowed by our academic, media and political elites- including our Indigenous elites- to flourish.
The doctrine of “the honour of the Crown”, which has almost always governed our Governments’ dealings with First Nations groups, has been pushed by our courts and political elites to such unreasonable extremes that in Indigenous rights Court cases it is now considered “bad form”, and not promoting “reconciliation”, for the Crown to fully and strenuously defend Indigenous claims even when there are strong, principled, fiscal and precedential reasons for doing so. Crown lawyers are now routinely instructed by their political masters, who can’t think past short-term political optics, to defend these legal claims with one hand figuratively tied behind their backs.
Even in this Restoule case the trial judge expressed dismay at some of the objectively reasonable positions taken in the litigation by Ontario and Canada, saying that “the Province’s submissions present an impoverished vision of the Honour of the Crown and all that it implies,” an example of a Court chastising a Crown litigant for fighting its side of the case too hard- for doing its job!- in my opinion an inappropriate chastisement that discourages the Crown in similar cases from fully defending itself when its very essences are under attack.
Treaties with Indian bands, which historically were regarded by both sides to them as one-time land surrender agreements, as evidenced by the first 150 years of post-Treaties conduct on the part of the Superior and Huron bands, are now being fashionably re-imagined and re-described as perpetual land and revenue sharing agreements.
It is in the context of this new, elitist-driven Indigenous-non-Indigenous zeitgeist, awash in white guilt and endless apologies- a zeitgeist providing fertile, welcoming and lucrative ground for history and law-rewriting Indigenous rights legal claims brought by talented, highly motivated, big city-based, Indigenous law-specialty law firms- that the present-day Chiefs of the Superior and Huron bands opportunistically decided, so-long-after-the-fact, that the Treaties in fact had promised an annuity that was payable in two parts after all- the $4 annual individual payment that had been faithfully paid for 150 years, and a second, the recently thought-up “Chief’s and the Tribes” payment that allegedly was to have been paid to the Chiefs and the Tribes for all those years, in addition to the $4 individual payments, but inexplicably, faithlessly and dishonourably had not been.
So, they sued Ontario and Canada for the recovery of all those “missed” payments, and, at trial, they won their case.
The trial judge, Madame Justice Patricia Hennessey, ruled that the Crown, (being a yet-to-be determined proportionate mix of Ontario and Canada), has a mandatory and reviewable (by the Court) obligation to increase the Treaties annuities when the economic circumstances warrant, and that, if the economic circumstances do warrant, must not only pay all those 150-175 years of missed payments to the Treaties bands, but must retroactively increase the amount of those missed payments, without limit, “so as to achieve the Treaty purpose of reflecting in the annuities a fair share of the resources, including the land and water in the territory.”
She wrote:
“The Crown is obligated to increase the promised lump sum annuity payment…if net Crown resource-based revenues from the Treaties territories permit it to do so without incurring loss.” (Emboldening added.)
In substance she ruled that the Treaties, which were on their faces one-time land surrender agreements, were in fact and in law perpetual revenue sharing agreements, and that Ontario and Canada now possibly owed the Treaties bands compensation, perhaps in the billions of dollars, for failing to regularly pay to “the Chiefs and the Tribes” additional monies representing their “fair share of the resources” of the Treaties territories going back to the 1850-1875 period.
She ordered that there be an accounting to determine this amount, if any, (which has yet to happen), which accounting exercise all parties have named “the Stage Three proceedings”.
The trial judge included in her judgement guidance for the Stage Three proceedings on the definition of “net Crown resource-based revenues”, meaning Crown resource-based revenues less relevant expenses.
Very significantly in her judgment she ruled that relevant expenses that could be considered in the upcoming Stage Three proceedings should not include “the costs of infrastructure and institutions that are built with Crown tax revenues.” This becomes extremely relevant in the discussion of the Court of Appeal decision below, and in my opinion the Court of Appeal’s handling of this phrase turns what appears to be a win in the Court of Appeal for the Treaties bands into a potentially huge practical loss.
The Court of Appeal Decision
Five judges of the Court of Appeal formed the panel that heard Ontario’s appeal of Justice Hennessey’s decision. Consistent with the Trudeau government’s policy of giving away the store in all litigation involving Indigenous groups, (see my essay The Trudeau Crown Sovereignty Surrender Directive), Canada did not appeal Justice Hennessey’s trial decision.
By a squeaker vote of 3-2 the Court of Appeal upheld Justice Hennessey’s basic interpretation of the Treaties to the effect that the Crown does not have the unfettered discretion to leave the collective lump sum annuities, and the $4 annual individual payments that flows from them, “as is” forever, as it has done. They upheld her ruling that the honour of the Crown demands that the Crowns turn their minds to the issue of whether these payments should be increased, fully engage with the Treaties bands in relation to them, and if the economic conditions warrant, that is, if it is determined that increased payments can be made by the Crown without it “incurring loss”, then pay the increased payments, presumably to “the Chiefs and the Tribes.”
The two appeal judges in their minority opinion said that Justice Hennessey was wrong in her interpretation of the Treaties. They used the words and phrases “unreasonable”, “distortion” (of the treaty language), “pure speculation” (in relation to some alleged motivations and events at the time of the making of the Treaties) and described her interpretation of the Treaties generally as “strained and illogical.” They wrote:
“We conclude that the trial judge erred in finding that the…Treaty annuities were a “collective entitlement” containing within them a separate ‘distributive amount” payable to individuals. That is, the trial judge erred when she expressly found that the collective entitlement was greater than the sum of the individual amounts that were distributed to members of the Robinson-Huron and Robinson-Superior Treaty First Nations.
This bifurcation of the annuities led to the trial judge’s conclusion that the $4 per person “cap” applied only to the individual distributive amount and that there was no cap on the collective entitlement, which was to be augmented, as expressed in her judgments, to reflect a fair share of the value of the resources, including the land and water in the Treaties territory.
In our respectful view, this conclusion was the product of errors of law in the interpretation of the Treaties. The only reasonable conclusion is that there was only one annuity under each Treaty, which was to be, (and in fact was historically) distributed in its entirety to the members of the First Nations. That annuity was subject to an aggregate “cap” of $4 person, but, in our view, this was a “soft cap” and was subject to further increases through the exercise of Her Majesty’s graciousness.”
Usually in an important legal case like this, with a split decision at the Court of Appeal and an extremely strong minority dissent, the losing side, relying on the importance of the issues at stake and the strong dissent, appeals to the Supreme Court of Canada for a final ruling.
This is what Ontario and Canada must do in this case.
The Restoule case raises novel, contentious and potentially destabilizing issues of national importance which the people of Canada deserve to have settled by the highest Court in the land.
The trial judge, upheld by the narrow majority of the Court of Appeal on this point, unprecedently ruled that an Indian treaty was and is a “reciprocal relationship between independent entities”, involving “shared spaces and resources.”
The trial judge, upheld by the narrow majority of the Court of Appeal on this point, unprecedently ruled that the Indian bands’ surrender and cession of the Treaty lands was a “gift” to the Crown, given with the “cultural expectation of equal reciprocity” i.e. that the future proceeds of the Crown development of the lands would be shared.
The trial judge, upheld by the narrow majority of the Court of Appeal on this point, unprecedently ruled that the Treaties were not one-time agreements, an opinion and belief which all parties to them, by their conduct in relation to them over a period of 150 years, seemed to have shared. The Treaties were, according to her, “future-oriented agreements situated within an ongoing relationship,” subject to constant review and renewal.
The trial judge, in my opinion, culturally infantilized the Indian bands, ruling that because of their “Anishnaabe perspective” they could not understand the Treaties in the same way as the Crown did, even though the evidence showed that the Indian band negotiators were intelligent and subtle individuals and that the Treaties were skillfully and conscientiously translated and explained to them before they were signed.
For instance, the trial judge ruled that the Treaties bands were in essence culturally incapable of understanding the meaning of the word “unfettered.” The majority in the Court of Appeal let this finding stand, while the minority essentially said that this finding was poppycock, being directly contradicted by the evidence of one of the Treaties bands witnesses, “Elder” Corbiere.
This, what I call a “cultural perspective dodge”, in my opinion, will be cynically and opportunistically used by other Canadian Indigenous treaty signatories in future to attempt to resile from clearly worded treaty provisions. Restoule, as it stands, creates a precedent for every other treaty in Canada to be challenged on similar “Indigenous perspective and worldview” grounds.
Other treaty challengers will now similarly argue: “Because of our unique Indigenous cultural perspective we didn’t and don’t understand our Treaty in the same Euro-Canadian way you did. We want our treaty reviewed and renewed. We want to keep our non-treaty honour of the Crown payments and benefits we get, plus, we now want our collective share of the value of the lands we only agreed to share with you, with interest, retroactive to when our forefathers signed the Treaty.”
A similar cultural perspective dodge by Ginoogaming First Nation, near Geraldton Ontario, was very recently successfully employed against Ontario and a local mining claims holder, Quaternary Mining. (See my two-part article on this important case, the heading for PART 2, being, The Ontario Superior Court of Justice Rules in Favour of Ginoogaming: In a Decision That Infantilizes Ginoogaming Members, the Court Rules That Because of Their Anishinaabe Culture They Couldn’t Read and Properly Comprehend Letters and Emails and Therefore They Were Not Properly Consulted Before the Quaternary Mining Exploration Permit Was Issued.
Parts 1 and 2 are at the writer’s website, thereisnodifference.ca.)
First Nations are now big-league, high-tech, sophisticated players in the Canadian economy. They all have top lawyers. They should not be allowed to get away with this cultural perspective dodge.
Canadians and their governments need to hear from the Supreme Court of Canada on the above and many other similarly important issues raised by the Restoule case.
But for the purposes of this article, we take the Court of Appeal decision as the (so-far) last word on the matter that it is.
The purpose of the next stage of this Court case- the Stage Three proceedings- is to conduct an accounting to determine how much money is owed to the Treaties bands. And in this accounting, as in all accounting exercises, the devil is and will be in the details.
Adding to the inherent deviltry in all accountings is the fact here that all five judges overruled Justice Hennessey’s ruling to the effect that the Treaties bands were entitled to a “fair” share of the net Crown resource-based revenues. They all ruled on that the word “fair” had never been used or seen in any of the evidence at trial. It had only been used by the Treaties bands’ lawyers in their final submissions, in what the Court of Appeal perceptively noted was an attempt by the lawyers at “narrative priming.”
The Court of Appeal ruled that the word “fair” be excised from the trial judgment, thus leaving the Treaties bands with a ruling that gives them an indeterminate- to be figured out- share in the net Crown resource-based revenues.
Adding to the total uncertainty of what monetary value the Court in the Stage Three proceedings might place on this indeterminate “share” is that fact that, as indicated above, the Court of Appeal very significantly overruled Justice Hennessey’s exclusion of the costs incurred by the Crown over the past 150-175 years of “the infrastructure and institutions built with Crown tax revenues”. All five judges ruled that these costs can be included as expenses in the calculation of “net Crown resource-based revenues.”
This is a fair and just ruling on the part of the Court of Appeal. I believe they added these costs back into the accounting calculations in the Stage Three proceedings to avoid the Treaties bands possibly getting double recovery. (See below.)
If Ontario and Canada appropriately embrace and apply it with the view of safeguarding the public purse and what remains of their sovereignty vis a vis First Nations groups, it should so profoundly impact the Stage Three accounting in their favour and that of the Canadian taxpayers they represent, that the result of this accounting could very well be that the Court will find that nothing is owed to the Treaties bands in this case.
Consider that, despite the Treaties payments to the Superior and Huron bands being paid only $4 annually per person over past 150 years, over this same period our Crowns have used federal and Ontario resource-based revenues to build “institutions and infrastructure”- which phrase properly defined would include all that makes up the bone, muscle and heart of the modern, comfortable and caring civilization that we are all, Indigenous Canadians included, blessed to be a part of- at an aggregate cost of untold billions of dollars. All of this has indirectly benefitted the Superior and Huron bands, and much of it has directly benefitted them.
Canadians, acting through their federal and provincial governments, the titular heads of which are the entirely fictive “Crowns”, are racially decent and caring people. Over this past 150-year period, and particularly within the past 60 years or so, we have, through our legislatures, sensibly and honourably preferred to deal with the obvious inadequacy of the $4 annual, individual payment, ($4 will barely buy you a cup of coffee at Starbucks), by, pursuant to the entirely appropriate “Honour of the Crown” duty to Indigenous Canadians, voluntarily providing them with numerous necessary and life-enhancing monetary payments, and significant other similar tangible and intangible benefits, none of which are called for or required by either the Superior or Huron Treaties, or any other treaty.
Ontario taxpayers, through our Crowns, provide to the Treaties beneficiaries free medical and dental care, massive grants for reserve operations, programs and infrastructure such as band offices, medical facilities, hockey rinks, police stations and community centres, funding for the construction and operation of reserve schools, grants for post-secondary education, special business start-up loans and loan guarantees, housing construction grants, programs for Indigenous youth and women, employment initiatives, funds for Indigenous claims lawsuits, funds for the bulk of their “consult and accommodate” expenses, funds for the various associations and federations, like the Assembly of First Nations, that make up such a large and vocal part of the powerful and influential Indigenous lobbying sector, funding urban Friendship Centres, funding APTN and money-losing, tax-write-off driven, Indigenous culture-oriented movies, and many other similar payments and benefits, all too numerous to list in full.
All the immediately above will now have to be factored into the accounting in the Stage Three proceedings, and rightly so.
In addition, Ontario taxpayers, through their Crowns, over this same 150-year period, have used resource-based tax revenues to construct infrastructure and institutions that have marked and enhanced material and social progress in the lives of all Ontarians generally, including Indigenous Ontarians, again, which will have to be considered in the Stage Three proceedings.
The costs incurred by our Crowns for every harbour, airport, road, highway, bridge, hospital– in fact our entire heath care system -school, college and university- in fact our entire educational system– hydro dam, power line –our entire judicial system which has served First Nations interests so especially well, as evidenced by this Restoule case itself– all other countless items of public infrastructure built, all other countless institutions created, and the programs those institutions deliver- all these costs incurred will also have to be factored into the calculation of the “net Crown resource-based revenue” which the Treaties beneficiaries have been awarded an indeterminate share of.
As stated, I believe that it is for this reason that the Court of Appeal added the “costs of infrastructure and institutions that are built with Crown tax revenues” into the accounting mix for the purpose of determining what “fair” compensation, if any, ought to be awarded the Treaties beneficiaries for their “share of the resources of the land” at the conclusion of the Stage Three proceedings.
And the reader is urged to remember that the augmentation clause only suggests that the lump sum annuity might be increased if it could be done so “without the Crown incurring loss.”
Ontario, as a fiscal entity, is already operating at a loss and has been for many years. It has one of the largest annual deficits in Canada, and every year that deficit grows larger. Any increase in the Treaties annuity would not only incur a loss, but it would also increase already existing losses.
The augmentation clause in the Treaties contemplates the annuity being increased if and when the Province is in surplus. That condition not being the case for many, many years, and not likely to be the case for the foreseeable future, means in my opinion that likely no increased annuity is owing.
It would be an affront to common sense and unfair to the Crown and the Canadian taxpayers it represents for the Crown not to get a credit in the accounting for the costs of all the above-noted infrastructure, institutions and payments, programs and benefits that have emanated from them to the direct and indirect benefit of the Treaties beneficiaries. That, as stated, would result in a form of double recovery for the Treaties beneficiaries. The Treaties beneficiaries would get to keep the benefit of the conferral of all these voluntary Honour of the Crown institutional and infrastructure benefits and payments while at the same time receiving likely billions of new taxpayer dollars to compensate for the supposed “missing” 150 years of lump sum payments. This, as stated would be an unfair situation of windfall, double recovery and unjust enrichment.
The majority in the Court of Appeal adverted to this reality, suggesting that even the Treaties bands would think that this was unfair, when they wrote:
“Based on the trial judge’s reasoning, the common intention of the parties was to share in such a way that would provide for both communities. This would suggest that the “share” promised is to be determined not only based on the extent of Crown revenues but also with reference to the relative wealth and needs of the different communities. Obviously the Anishinaabe would not have expected their communities to suffer a wide range of deprivations, including substandard housing and boil water advisories, while non-Indigenous communities thrived. Nor was it likely, based on the Anishinaabe principles discussed by the trial judge, that the Anishinaabe would have wished to enjoy great personal wealth while their fellow Canadians suffered deprivation.” (Emboldening added.)
The Judges in the minority clearly adverted to the need to avoid a double recovery or unjust enrichment situation when they directed the trial judge to, in the Stage Three proceedings, invite further submissions from the parties, concerning, amongst other things, “the considerations to be taken into account in determining whether the Crown can increase the annuities without incurring loss, including the extent to which the Crown is entitled to take into account its other obligations and expenditures, both within and outside the Treaty territories.”
In fact, if one thinks about it for more than a moment, one concludes that the conferral of all these voluntary Honour of the Crown institutional and infrastructure benefits to the Treaties beneficiaries represents the already completed fulfillment of the letter, intention and spirit of the augmentation clause in the Treaties.
The Crown did augment the benefits to the Treaties beneficiaries.
It did this, not through formal treaty mechanisms, but through its 150 year pattern of conduct in building institutions and infrastructure, both directly and indirectly for the benefit of the Treaties beneficiaries.
The augmentation clause debt, if it should be shown to exist, has already been paid.
It has been paid “in kind” rather than in cash.
But it has been paid.
Not just in Stage Three accounting terms, but in moral terms and in terms of honour, the Treaties augmentation clause debt, if any should ever be found to exist, has already been paid.
The Treaties bands are now loudly calling for the Crowns, in the name of “reconciliation”, to “come to the table” and settle out of Court. And it’s no wonder. They rightly fear that the Stage Three accounting proceedings, which will be hopelessly complicated, lengthy and expensive, now that the aforesaid 150 years of infrastructure and institutions costs are to be factored into it, will result in them ending up with nothing.
But nothwithstanding that, for the reasons stated above, this case must be appealed to the Supreme Court of Canada. The unprecedented and destabilizing majority Court of Appeal decision in this case just cannot be the last word on matters of such crucial matters of national importance.
Finally, stepping back from the legal and accounting issues raised by Restoule, and looking at the case from a moral perspective, one is saddened.
The Restoule decision continues the trend on the part of our elites, Indigenous and non-Indigenous, to continue to further divide Canadians on the base of race.
It is actually shocking to think that the majority of our Court of Appeal would think it reasonable to double-down on the perpetuation and expansion of an antiquated, race-based, separate but equal, apartheid-like social and political model, that is, on a daily basis, demonstrably causing so much harm to the majority of vulnerable, marginalized Indigenous Canadians. The benign and unintentional “systemic racism” inherent in the Indian Act, the reserve system, section 35 of the Constitution Act and in the cases decided under it, now including this one, will continue.
The Court of Appeal majority decision in Restoule further condemns Indigenous and non-Indigenous Canadians to continue to co-exist in a perpetually uncertain, unstable, unending, and adverse relationship. No “reconciliation” worth its salt can ever come out of such a situation as this.
The Restoule decision is demoralizing to Canadians, like me, who dream of a race-free, civic coming-together of Indigenous and non-Indigenous Canadians, because it will only widen the divisions between us.
You do not emerge from the isolation of one form of racism to enter and confine your country to another and further isolating form of it.
With all due respect to the Court, this is what the trial decision in Restoule as upheld by the majority in the Court of Appeal, does.
Our elites, including our judicial elites, must start thinking of ways, based on Nelson Mandela’s goal and vision of “one set of laws for all”, to bind us together, instead of, as this decision does, bind us apart.
The time for the healing of the wounds has come.
The moment to bridge the chasms that divide us has come.
The time to build is upon us. – Nelson Mandela
————————————————————————
Peter Best
November 17th, 2021
