First Nation of Nacho Nyak Dun v. Yukon, 2017 SCC 58

On December 1, 2017, the Supreme Court of Canada released the judgment in Nacho Nyak Dun v. Yukon, 2017 SCC 58 (“Nacho Nyak Dun”) a case concerning the interpretation of modern treaties and, in particular, the Crown’s obligations in the collaborative land use planning process established by the Yukon Final Agreements.

Summary

The Supreme Court of Canada unanimously ruled that the Yukon Government acted improperly by proposing a unilaterally developed land use plan at the end of an independent, treaty-based land use planning process. The Yukon Government was ordered to return to the final stage of the treaty land planning process and consult on the plan proposed by the independent commission.

The court also made pronouncements related to modern treaty interpretation, the Crown’s conduct in treaty mandated collaborative process and the court’s own role in adjudicating modern treaty disputes.

Yukon’s Land Use Planning Process

Yukon is home to nearly half of Canada’s modern treaties. Yukon’s modern treaties are based on the Umbrella Final Agreement (“UFA”) – a 1993 template negotiated by the Council for Yukon Indians, Canada and Yukon. The UFA is used to structure Final Agreements for each First Nation which, once approved, settle outstanding land claims in exchange for a quantum of settlement land, self-government agreements, and territory-wide collaborative or co-management regimes in the areas of land use planning, development assessment and forestry, water, resource, fish and wildlife management.

It was the collaborative land use planning regime set out in Chapter 11 of the UFA, and individual Final Agreements, that was at issue in the Nacho Nyak Dun decision. Chapter 11 of the Final Agreements outline how to collaboratively plan use of water, land and resources in regions across the territory. To develop regional plans, the UFA laid out three steps following the creation of an independent planning commission (“the Commission”):

Step One – The Yukon Government is required to consult on the Commission’s extensively researched plan (“Recommended Plan”) before approving, rejecting or proposing modifications to it (s.11.6.2).

Step Two – Following this consultation, the Recommended Plan is returned to the Commission with written reasons for modification or rejection. The Commission considers these reasons and develops a Final Recommended Plan (“Final Recommended Plan”) to again submit to government. (s. 11.6.3.1).

Step Three – The Yukon Government has further consultation obligations on the Final Recommended Plan before it is approved, rejected or modified (s. 11.6.3.2).

The Peel Watershed Land Use Plan

The Peel Watershed Planning Region is only the second region in the Yukon for which a regional land use plan had been proposed. Five other planning regions, including those most affected by development and population, have not reached the Recommended Plan stage and land use planning across the territory was put on hold pending the outcome of this case. The Peel Watershed Planning Region consists of approximately 68,000 square kilometers in the northeast Yukon, an area roughly the size of Nova Scotia, and contains some of North America’s largest tracts of pristine wilderness. The Na-cho Nyak Dun, Tr’ondëk Hwëch’in and Vuntut Gwitchin First Nations, all Final Agreement Nations, have traditional territory in the Peel watershed and control parts of the area as Settlement Land.

The Peel Watershed Recommended Plan was delivered by the Commission to the Yukon Government in late 2009. Following four years of research and study, the Recommended Plan included division of the region into 21 management areas and protection from further development in 80.6% of the watershed. Further permitted development was to be allowed in the remaining 19.4%.

In February 2011, the Yukon Government responded to the s.11.6.2 Recommended Plan generally requesting “a more balanced plan” and providing written submissions on zoning and management area designations.
The Final Recommended Plan proposed modifications to the land uses and management areas in the Recommended Plan based on the Yukon Government’s proposed modifications and other consultations but did not change the overall quantum of development vs. conservation as no written reasons had been provided on this matter. The Commission released the Final Recommended Plan in July 2011.

Instead of engaging in consultation with respect to the approval, rejection or modification of the Final Recommended Plan as required under s.11.6.3.2 of the UFA, the Yukon Government issued eight principles to “guide modifications and completion” of the Peel Watershed Land Use Plan.

On January 21, 2014 the Yukon Government announced the land use plan based on the eight principles that it unilaterally intended to implement on non-Settlement Land (the “Government Plan”). The Government Plan proposed only 29% of land protected from development and the remaining 71% open for potential development. The Government Plan also created several new land use designations that had not been raised in the land use planning process.

A judicial review of the Government Plan was commenced by seven co-applicants – the three Final Agreement First Nations, two not-for-profit organizations, and two individual Yukoners collectively seeking a declaration that the Yukon had improperly concluded the land use planning process required in the UFA.

Trial Decision – 2014 YKSC 54

At trial in the Yukon Supreme Court, Justice Veale concluded that the process followed by the Yukon Government in the final stage of s.11.6.3.2 “did not respect the planning process” and that Yukon’s interpretation of that section was “impermissibly flawed” (at para 197). He found that by developing eight new core principles and proposing new land designations that were never considered by the Commission during the s. 11.6.3.2 stage, Yukon had “effectively usurped the planning process and the role of the Commission” (at para 198).

Justice Veale quashed the Government Plan and required Yukon to re-engage in consultation pursuant to s. 11.6.3.2 on the Final Recommended Plan. Further, Justice Veale restricted the Yukon Government’s options with respect to the Final Recommended Plan. As per his order, the Yukon Government was permitted to approve or modify the Final Recommended Plan but could not reject it as the Yukon had not previously raised sufficient modifications or proposed rejection of the Recommended Plan.

Court of Appeal – 2015 YKCA 15

On appeal, the Yukon Court of Appeal agreed that Yukon Government had breached the Chapter 11 process and upheld Justice Veale’s decision to quash the Government Plan. However, the Court of Appeal disagreed on when the breach occurred and therefore the point in the process that the matter should be remitted to. Where Justice Veale ordered that the Yukon Government breached its obligations when Yukon Government proposed the Government Plan instead of approving, rejecting or modifying the Final Recommended Plan, the Court of Appeal found the breach occurred when Yukon Government failed to propose modifications at the 11.6.2 stage and so ordered the matter be remitted back to an Step One in the process when the Yukon Government could remedy its failure to propose modifications.

Supreme Court of Canada – 2017 SCC 58

Six co-appellants appealed the Court of Appeal decision. Before the Supreme Court of Canada, the Yukon Government conceded to breaching obligations it had under Chapter 11, but parties continued to dispute the timing of the breach and the appropriate remedy.

The unanimous judgment, delivered by Justice Karakatsanis, allowed the appeal in part – a large victory for the appellants. Justice Veale’s order quashing the Government Plan was upheld and the matter was remitted to the Final Recommended Plan stage. However, the restrictions Justice Veale ordered with respect to modifying or rejecting the Final Recommended Plan were set aside.

The Supreme Court held that modifications at the final stages of the planning process are permittable so long as they “(1) are based on those it proposed earlier in the process or (2) respond to changing circumstances” (Nacho Nyak Dun para 5). In all cases the Yukon Government could “only depart from positions it has taken earlier in the process in good faith and in accordance with the honour of the Crown” (Nacho Nyak Dun at para 5).

The Supreme Court also explored the role of the Courts in disputes between parties to a modern treaty holding “courts should generally leave space for parties to govern together and work out their differences. Indeed, reconciliation often demands judicial forbearance. It is not the appropriate judicial role to closely supervise the conduct of the parties at every stage of the treaty relationship” (Nacho Nyak Dun at para 33).

What does the case mean for other modern treaties?

a. Interpretation of modern treaties
The Court reiterates principles from Moses and Little Salmon that the terms of modern treaties will be interpreted “in light of the text as a whole and the treaty’s obligations” (Nacho Nyak Dun at para 37). The purpose of treaties is to advance reconciliation, an endeavor accomplished by the “respectful fulfillment of a modern treaty’s terms” (Nacho Nyak Dun at para 38).
What does this mean – the Crown cannot rely on a narrow interpretation of the treaty and must look at the text as a whole as well as the treaty’s objectives. While this may not achieve the “spirit and intent” interpretation that many modern treaty Nations wish to see, it is a further step forward from the narrow interpretative approach often argued by the Crown.

b. Role of the Courts in enforcing modern treaties.
The Yukon Court of Appeal was rebuked for delving too deeply into the relationship between the parties when it overturned the trial decision. The judgement opens with a warning that “reconciliation often demands judicial forbearance” (Nacho Nyak Dun at para 33) and goes on to speak specifically to the Court of Appeal’s decision, stating “The court’s role is not to assess the adequacy of each party’s compliance at each stage of a modern treaty process. Rather, it is to determine whether a challenged decision was legal, and to quash it if it is not. Close judicial management of the implementation of the modern treaties may undermine the meaningful dialogue and long-term relationship that these treaties are designed to foster.” The hands-off guidance is tempered with a recognition that the courts forbearance “should not come at the expense of adequate scrutiny of Crown conduct to ensure constitutional compliance” (Nacho Nyak Dun at para 34).

The Supreme Court has long stated that reconciliation is not achieved in the courtroom but rather is the product of negotiation, dialogue and, eventually, treaty (Delgamuukw at para 186 and 207, Haida Nation at para 38, Manitoba Metis Federation at para 71). As such it is not surprising that the Supreme Court has seemingly narrowed the role of courts generally in resolving modern treaty disputes. However, the language of “judicial forbearance” is stronger direction than seen previously.

What does this mean – The Nacho Nyak Dun decision was straightforward in the sense that it dealt with a final decision which was subject to judicial review. Many concerns modern treaties have pertain to ongoing implementation grievances – where treaty commitments are continuing or, for that matter, have not yet commenced. The direction of “judicial forbearance” is concerning as it may be used to support an argument of noninterference by the courts in certain cases. While the courts are directed to “determine whether the challenged decision was legal, and to quash it if it is not” (Nacho Nyak Dun at para 60) it remains to be seen how courts will exercise the hands-off direction given in this case.

c. Collaborative processes in modern treaties.
The decision grounds the importance of all-party participation in the UFA mandated collaborative processes. The court cites Yukon’s Chief Negotiator, Barry Stuart, who outlines that First Nations chose to establish constitutionally protected “shared responsibility in the management of water, forestry, land and culture” as opposed to negotiate for larger tracts of Settlement Land. It was not just land quantum or settlement dollars that were agreed to in the Final Agreements, but these amounts were reduced in order to obtain the collaborative and co-management regimes set out in the UFA that fundamentally changed Yukon’s political landscape. The Nacho Nyak Dun decision recognizes this trade-off and the importance of meaningfully implementing those collaborative processes.

Specifically to the UFA land use planning process, the court states “it is a clear objective of Chapter 11 to ensure First Nations meaningfully participate in land use management in their traditional territories. As well, the Chapter 11 process is designed to foster positive, mutually respectful, and long-term relationship between the parties to the Final Agreement.” (Nacho Nyak Dun at para 47).
What does this mean – Modern treaty Nations should expect more fulsome Crown participation in the collaborative processes established pursuant to Final Agreements. While there was little doubt that the honour of the Crown applied to government participation in shared decision-making processes prior to the Nacho Nyak Dun decision, the Supreme Court comments ground how important meaningful participation is in the collaborative regimes established pursuant to modern treaties.

d. Specific to the Yukon Land Use Planning process.

The court has clarified when Yukon Government can modify a Commission recommended plan. While the Yukon Government is permitted to make late-stage modifications “that respond to changing circumstances, such as those that may arise from the second consultation and changes made by the Commission in its reconsideration of the plan” (Nacho Nyak Dun at para 52), the government “cannot ‘modify’ a Final Recommended Plan so significantly as to effectively reject it” (Nacho Nyak Dun at para 52) nor can they “use these proceedings to obtain another opportunity to exercise a right it chose not to exercise at the appropriate time” (Nacho Nyak Dun at para 61).

One of the big questions over the four years of litigation is whether the Yukon Government could reject a collaboratively developed land use plan. The court clearly avoids this issue, stating “it is premature to interpret the scope of Yukon’s authority to reject the Final Recommended Plan after it consults with the affected First Nations, and it is unnecessary to do so in order to resolve this appeal” (Nacho Nyak Dun at para 63).

Practically, the Nacho Nyak Dun decision means that the conservation ratio set out in the Peel Watershed Final Recommended Plan is likely to be approved. While the court refrains from commenting on rejection, it is unlikely based on the entire judgement that such a rejection would be legally permitted. Additionally, the current Yukon Government has clearly committed to approving the Final Recommended Plan pending the court ordered final consultation.

What does this mean – This means that governments are much more likely to participate throughout future planning processes. The Yukon Government’s response to the Recommended Plan was a four-page letter with a sixteen-page appendix. The clarification on how and when modifications can be made mean that governments are likely to articulate concerns earlier and more thoroughly to ensure that they are not foreclosed later in the process from making modifications. For modern treaty Nations this may require more extensive review as governments provide more in-depth objections and proposed modifications.