Canada v Cold Lake First Nations

The Federal Court released a decision on October 23, 2015 in <a href="http://canlii.ca/t/gls85" title="Cold Lake First Nations"><i>Canada v Cold Lake First Nations</i></a>, staying the Attorney General of Canada’s application to enforce the First Nations Financial Transparency Act against the respondent bands. Additionally, the Court dismissed an application for mandatory injunctive relief from one of the respondents, Onion Lake Cree Nation, against the Minister of Aboriginal Affairs and Northern Development Canada in respect of the Minister's withholding of funding for so-called non-essential services.

Background

This litigation stems from concerns over the enforceability of the First Nations Financial Transparency Act. On December 8, 2014, the Attorney General filed an application under the Act to force the respondent bands to publicly report certain financial information. Shortly thereafter, the bands filed a claim in the Court of Queen’s Bench of Alberta challenging the Act. The bands challenged the constitutionality of the Act arguing that it violated their asserted Aboriginal and Treaty rights, including a right to self-government, and breached the Crown’s duty to consult them with respect to these rights. Further, the bands asserted that the Act was a violation of sections 15 and 25 of the Charter and a breach of the Crown’s fiduciary duty towards Aboriginal peoples.

Sawridge First Nation, one of the respondents in this matter seeking the stay of proceedings, first stated its opposition to the Act in 2012. In 2013, Sawridge’s Chief Roland Twinn testified before the Standing Senate Committee on Aboriginal Peoples that Sawridge had regularly disclosed financial information to Aboriginal and Northern Affairs Canada (AANDC), but always on the understanding that the information would be held in the strictest of confidence. Chief Twinn expressed his willingness to continue these disclosure practices and publically account for the Sawridge’s funding. However, Chief Twinn had serious concerns with the Act’s requirement for disclosure of the financial affairs of Sawridge’s private commercial operations and he contested the constitutional validity of the Act, advising that its passage into law would trigger a legal action.

Onion Lake Cree Nation also strongly opposed the Act and was also involved in the application to stay the Act's enforcement. Onion Lake filed evidence indicating that AANDC had threatened to withhold funding if the band failed to comply with the Act as early as October 27, 2014. An affidavit presented by Onion Lake stated that over $1 million of funding had been withheld by AANDC as of May 14, 2015 due to Onion Lake’s refusal to comply with the financial reporting ordered by the Act.

Relief sought

Sawridge and Onion Lake sought to either enjoin the Crown’s application from further prosecution or to stay the application until the resolution of their actions challenging the constitutionality of the Act. Additionally, Onion Lake claimed damages and injunctive relief based on AANDC’s decision to withhold funding from the band. Onion Lake claimed that the withholding of funds had negatively impacted hundreds of band employees and impeded the construction of on-reserve housing.

Relief granted

Both this challenge against the Crown’s enforcement application and the parallel actions brought forward by the bands involved Aboriginal and Treaty rights. The Court followed Soowahlie Indian Band v Canada and decided that an action would better serve the needs of Aboriginal and Treaty rights litigation than an application. An action, the Court reasoned, would allow for a more complete evidentiary record. Furthermore, the Court found that the public good would be better served by staying the Crown's application to allow the bands to move forward with their constitutional claims in the parallel actions. The Attorney General’s application under the Act was stayed until further order of the Court.

On the other hand, the Court found that Onion Lake did not meet the burden of proving irreparable harm for the purposes of obtaining injunctive relief. The failure to meet this burden stemmed largely from an inadequate evidentiary record. Although Onion Lake had proved that there was a significant retrenchment of program funding, it did not demonstrate any concrete evidence of non-compensable harm. The Court emphasized that the decision on injunctive relief was based solely on the inadequate evidentiary record and left open the option for Onion Lake to bring forward a similar claim with more specific evidence in the future.

The Court was also careful to state that its decision should not be read as an endorsement of the actions taken by AANDC to date. The Court noted that the Crown has an ongoing legal obligation to consult and the Minister is required to carefully consider the prejudicial effects of further administrative action on the bands’ members. The Court warned that the Crown’s failure to consult before withholding further funding from the bands would likely be a consideration in the fact of evidence showing non-compensable injury to band members in the future.

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