Thunderchild First Nation v Canada

The Federal Court released a decision on February 18, 2015 in Thunderchild First Nation v. Canada (Indian Affairs and Northern Development), dismissing an application for judicial review of a decision of the Minister of Indian and Northern Development Canada (the Minister) to place Thunderchild First Nation (TFN) under third party management for refusing to sign an Aboriginal Recipient Funding Agreement (ARFA).

Each year, Parliament makes social program funding available to First Nations. An ARFA typically governs how these funds are transferred and administered. Aboriginal Affairs and Northern Development Canada (AANDC) can intervene and appoint a third party funding agreement manager (TPFAM) if the First Nation fails to comply with the ARFA.

In 2013, AANDC announced changes to the ARFA model agreement. TFN was opposed to these changes and refused to sign its 2014-2015 ARFA. At a meeting to discuss its refusal to sign, AANDC mentioned to TFN that a TPFAM may need to be set up if the ARFA went unexecuted. Approximately one week following this meeting the TFN was informed that a TPFAM would be appointed to deliver programs and services to the TFN community. Approximately one week following that notice, a TPFAM was appointed. Two days following the appointment, the TFN chief sent a letter to express disagreement with a TPFAM’s appointment.

TFN argued that it was unreasonable for the AANDC to appoint a TPFAM because it had not defaulted on the ARFA. However, the Court cited a previous Federal Court decision for the proposition that a TPFAM could be appointed even in situations where an ARFA has not been signed. The Court held that AANDC can appoint a TPFAM in the absence of default when the appointment is “necessary to ensure that programs and services provided to members of a First Nation are not interrupted”.

In reviewing AANDC’s decision to appoint an TPFAM, the Court found that AANDC carefully weighed (1) the interests of the people of TFN, (2) the importance of maintaining essential programs and services without disruption, (3) the importance of protecting public funds, and (3) the urgency of the circumstances. In doing so, the Court held that AANDC acted reasonably in making its decision to appoint a TPFAM. The Court further concluded that the Minister satisfied the Crown’s duty to consult the TFN and, in appointing a TPFAM, the Minister governed himself in accordance with the principles of natural justice and procedural fairness.

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