Canada v Elsipogtog First Nation

Background

The dispute underlying this matter centres on the eligibility requirements for income assistance on reserves in Atlantic Canada, and whether or not these requirements must strictly mirror the eligibility requirements for off reserve residents of the Atlantic provinces.

There is no specific federal legislation regulating essential services and programs to First Nations. Instead, Canada relies on directives from the Treasury Board to provide many of these services and programs, and Aboriginal Affairs in turn develops policies based on the Treasury Board’s directives.  In 1964, the Treasury Board issued a directive that enabled Aboriginal Affairs to adopt provincial or local municipal standards and procedures for relief assistance for First Nations, including income assistance. This standard was implemented directly by Aboriginal Affairs through its own policies until the early 1980s when they began to enter into agreements for income assistance to be self-administered by individual First Nations to on reserve members.  In 1990, the Treasury Board entered into a Memorandum of Understanding (MOU) with Aboriginal Affairs that consolidated existing authorities for all education and social development programs, stating that “the qualifying requirements and assistance schedules of the general assistance program of the province or territory” must be adopted for delivery of social assistance on reserve.

In 1991, Aboriginal Affairs sent a draft regional manual dealing with social assistance in New Brunswick to First Nations in the province. Elsipogtog First Nation responded to the draft manual by setting out its concerns with the decision to adopt and follow the rates and conditions in force in the province. Elsipogtog developed its own social assistance manual in 1994 and has been following this manual since at least 1999. Aboriginal Affairs’ 1991 manual and the Elsipogtog manual differed in how they determined eligibility for social assistance, with the 1991 manual applying a “financial budget deficit” principle while the Elsipogtog manual relied on certain situations to trigger eligibility, such as having a certified medical condition or being a single parent. Aboriginal Affairs pointed out their concerns with the differing criteria between the two manuals, but did not review Elsipogtog for compliance with the 1991 manual until 2010. In their 2010 compliance review they audited a sample of Elsipogtog assistance recipients and found that several individuals were receiving income assistance without any reduction of benefits for their employment income, as would be the case for income assistance recipients living off reserve.

Starting in 2004, Aboriginal Affairs also made attempts to update its regional and national income assistance manuals. It developed a draft national manual in 2004 in order to establish national principles to guide the development of regional policies. One of the guiding principles in this 2004 draft national manual was that income assistance was to be delivered at “standards reasonably comparable to the reference province or territory of residence” for those receiving the assistance. The 2004 draft national manual was followed by a final 2005 national manual that again contained references to the “reasonably comparable” standards in the 2004 draft national manual, but also contained references to the income assistance program being guided by provincial or territorial rates and eligibility criteria, as well as a reference to standards being taken from provincial or territorial income assistance legislation.

Following the release of the 2005 national manual, Aboriginal Affairs began to update its regional manuals including its manual for the Atlantic region. Aboriginal Affairs presented a 2011 draft Atlantic manual to New Brunswick First Nations that contained the same reference to “reasonably comparable” standards, but also noted that the income assistance program on reserve was administered using the same rate and eligibility criteria as the parallel program for off reserve residents of the province. New Brunswick First Nations reacted negatively to the 2011 draft manual and following several discussions between them and Aboriginal Affairs, Aboriginal Affairs eventually decided that it would not implement the 2011 draft manual and would instead replace it with a 2012 national manual. This national manual again contained the same reference to “reasonably comparable” standards, while also stating that eligibility and payment amounts would be determined based on provincial or territorial standards.

Federal Court decision

After hearing the challenge to the Minister’s decision to enforce strict compliance with provincial eligibility criteria and rates, the Federal Court held that the Minister’s action was consistent with the requirements of the 1990 MOU between Aboriginal Affairs and the Treasury Board for income assistance to be provided at the same level as for off reserve Canadians. The Federal Court also rejected the argument of the First Nations applicants that the manuals’ reference to provincial standards constituted an unconstitutional delegation of the Minister’s power. The Federal Court further rejected an argument that the Minister’s decision to enforce strict compliance involved the Minister having fettered his discretion, since the 2012 manual still referred to “reasonably comparable” standards. The eligibility requirements in the Elsipogtog manual were found to differ from those required elsewhere in New Brunswick, and the Federal Court found that AANDC’s 2012 national manual was an attempt to realign the eligibility requirements for income assistance recipients on and off reserve in the province.

Although the Federal Court found that the Minister’s decision to strictly enforce provincial standards was entirely consistent with the 1964 directive from the Treasury Board and the 1990 MOU between the Treasury Board and Aboriginal Affairs, it still concluded the Minister’s decision had been unreasonable on the basis that the Minister had failed to assess the impact of his decision on First Nation recipients of income assistance. The Federal Court also held that the Minister had failed to meaningfully consult the First Nations that would need to adapt to the 2012 national manual. Although the Federal Court rejected the argument that the honour of the Crown was engaged by this decision, it found that a duty of consultation was owed to the First Nations based on administrative law grounds of procedural fairness. It was held that the Minister ought to have engaged in substantive discussions with the affected First Nations before strictly enforcing provincial standards on them.

Federal Court of Appeal decision

The Federal Court of Appeal came to very different conclusions on several key issues.

The Court of Appeal found that it was “clear and unambiguous” that the 1990 MOU directs the Minister to provide income assistance to First Nations on the same terms as are in force in whichever province a reserve is situated in. This MOU set out the Minister’s “marching orders” and Aboriginal Affairs had to dispense income assistance funds consistent with it. In the Court of Appeal’s view, the Minister had “absolutely no discretion” as to how the 1964 directive and 1990 MOU were to be applied. They required strict mirroring of income assistance eligibility criteria on reserve and off. The Court of Appeal found that the Federal Court decision was incorrect in concluding otherwise.

The Federal Court of Appeal also interpreted the various subsequent manuals as having been consistent with this MOU. Taken in context to each manual, the Court of Appeal held that the expression “reasonably comparable” could only mean that Aboriginals are to be treated in the same way as non-Aboriginals for the provision of income assistance. The Court of Appeal found that there was no indication in any of the manuals under consideration that the Minister ever intended to depart from the direction set out in the 1990 MOU. The Court of Appeal found that the Federal Court decision was incorrect to conclude that any change of policy had occurred.

The Court of Appeal also held that the affected First Nations were not entitled to procedural fairness or consultation with respect to the Minister’s decision. This conclusion was based on its findings that the Minister had no discretion to deviate from the 1990 MOU and that there had been no change in policy indicated in the various manuals between 2004 and 2012.

Finally, the Court of Appeal held that even if Aboriginal Affairs had interpreted the 1990 MOU more permissively prior to 2012, this would at most entitle the affected First Nations to formal notice of the intention to enforce strict compliance and allowance for a transition period, which it found to have been afforded to them.