Current Problems

Treaties and Land Claims

Ontario says it doesn’t owe First Nations seeking compensation for broken treaty

February 2, 2023
Legislature Protective Service members walk the perimeter at Queen’s Park in Toronto on February 4, 2022

The Globe and Mail: Indigenous communities are in court seeking billions of dollars in compensation after almost 150 years of receiving small annual payments in return for ceding an area the size of France. But the Ontario government is arguing they are owed nothing, or at most $34-million.

The wide divergence in claims was on display this week in an unprecedented court hearing in Sudbury, Ont., whose purpose is to determine how much the Crown owes for breaking a treaty promise to share wealth produced by the natural resources of a vast area in Northern Ontario.

A lawyer for several Anishinaabe communities collectively made up of about 15,000 people told Ontario Superior Court Justice Patricia Hennessy on Monday that they are owed at least $8-billion, and perhaps as much as $100-billion.

In 1850, Anishinaabe leaders signed two treaties with the Crown that gave over control of resource-rich lands stretching from the north shores of Lake Superior and Lake Huron to Hudson Bay, which today includes the communities of Thunder Bay, Sault Ste. Marie, Sudbury and North Bay.

But the Crown, after paying an initial lump sum of a few thousand dollars, has been making annuity payments capped at just $4 a person since 1875.

Justice Hennessy will be devising a revenue-sharing plan to compensate for the past resource wealth generated on these treaty lands. It will be the first such court-ordered plan in Canada, and it will have enormous practical consequences for thousands of Anishinaabe people in Northern Ontario, who courts have said were left impoverished by the Crown’s neglect of its treaty promise.

Five years ago, Justice Hennessey ruled that the Crown had broken a pledge, set out in two 1850 treaties, to augment the annuity payments as Crown resource revenues permitted. In 2021, the Ontario Court of Appeal largely upheld her ruling.

The judge now has a monumental task: she must determine what revenues to count, what expenses to subtract from those revenues, what interest rate should apply to reflect growth over time and what share of the net revenues should be paid to the First Nations involved.

And on top of all that, she needs to decide which level of government – federal, or provincial – is on the hook for the money owed. On Tuesday, federal lawyer Glynis Evans told Justice Hennessy the vast majority is owed by Ontario. On Wednesday, Ontario’s lawyer, Tamara Barclay, said all of it is owed by the federal government. She added that Supreme Court rulings of the late 19th century had resolved the issue.

But the complications do not end there. Even as four months of hearings got under way this week in a large, makeshift courtroom in Sudbury, the province is still appealing the Ontario Court of Appeal’s earlier ruling on whether the Crown actually did break its treaty promise to share the wealth. That case is pending at the Supreme Court of Canada.

If the Supreme Court overturns that ruling, the entire exercise in Sudbury would be for naught. But given that the First Nations’ lawsuit over the treaty promise began in 1999, and that Anishinaabe elders knowledgeable in oral history and cultural matters are not getting any younger, the Supreme Court rejected Ontario’s request for a stay of the compensation hearings. So did Justice Hennessy.

The First Nations who are parties to the case have shifted. The Red Rock and Whitesand First Nations, who are part of the Robinson-Superior Treaty, have been joined by three other First Nations. Another seven First Nations say they never gave over title to their lands and are trying to win court recognition of that claim (though not as part of the current case). They are represented at the hearings in case they do not ultimately establish that they have title.

Another 21 First Nations are part of the Robinson-Huron Treaty, a territory also addressed by the initial court rulings. This group is now in negotiations with the two levels of government. Their compensation hearing has been adjourned indefinitely.

Harley Schachter, a lawyer representing Red Rock, Whitesand and three other First Nations, likened Ontario’s position that governments owe virtually nothing to that of a fox left in charge of the chickens. “The fox turns to the judge – got egg all over his face – and in the most reassuring manner and calm tone he can muster says, ‘Look, judge, firstly, about the eggs, there are none, so I don’t know why the chickens are complaining,’” he told Justice Hennessy on Monday, the first day of the hearings.

His clients are claiming an 84-per-cent share of net Crown revenues in five areas, including mining and forestry. The 84 per cent is based on the share of economic risk the First Nations say they took on in the joint venture represented by the treaty.

The higher estimates in the tens of billions of dollars reflect not just what the Crown recouped in various fees, but the higher fees it could have charged if its aim had been to collect on their full value. (Mr. Schachter called this approach “economic rents.”)

On Friday, two-time Nobel Laureate Joseph Stiglitz, an economist, will testify in support of that approach. “Yes, the final amounts claimed as payable are large,” Mr. Schachter told Justice Hennessy. “They are large because the Crowns did not honour the treaty obligation. They are large but they are not untoward.”

Ms. Barclay, representing Ontario, told Justice Hennessy the province lost $7.9-billion on resources in the territory. That figure includes the costs of building roads and railways. An alternative approach to determining net revenues would mean $34-million is owed to the Anishinaabe, she said. The First Nations argue that road and railway costs are part of nation-building and should not be deducted from revenues.

Ms. Evans, representing the federal government, said Tuesday the Anishinaabe’s share of net Crown revenues should be roughly 10 per cent, reflecting the ratio of Indigenous to non-Indigenous people in the Robinson-Superior treaty territory. She did not put forward a precise dollar figure, but opposed the “economic rents” approach of the First Nations.