‘”Pressing needs” do not mean the bare necessities of life’: Canada’s highest court rules First Nations with financial resources can qualify for advance costs, but significant barriers still remain: Anderson v Alberta, 2022 SCC 6

A greater number of First Nations may be able to pursue section 35 claims following the Supreme Court of Canada’s (SCC) unanimous decision that a First Nation with substantial resources can qualify to have its legal fees paid in advance if the Nation cannot meet both its communities’ “pressing needs” and fund the litigation. Applying a contextual analysis informed by principles of reconciliation, the case embodies a paradigm shift within the judicial system towards improving reconciliation and access to justice for First Nations. However, First Nations still face a high evidentiary burden in proving advanced costs applications.

On March 18, 2022, the Supreme Court of Canada unanimously held that a First Nation with substantial resources could qualify to have its legal fees paid in advance if those resources are needed for other “pressing needs.” In reaching this decision, the Court revised the threshold of “impecuniosity” – which has been a burden for many First Nations litigants – by incorporating principles of reconciliation into the legal analysis.

While the case was ultimately sent back to the Alberta Court of Queen’s Bench (ABQB) for a new hearing due to insufficient evidence, the decision embodies a paradigm shift within the judicial system towards improving reconciliation and access to justice for First Nations. How the lower courts apply this case has yet to be seen, but we are cautiously optimistic it will help open the courtroom door to First Nations seeking access to justice and accountability.

Case History

For over a decade, Beaver Lake Cree Nation (“Beaver Lake”) has been involved in expensive, ongoing litigation against the Crown to challenge how extensively its traditional lands had been “taken up” for industrial and resource development. The case is presently scheduled for a 120-day trial in January 2024 and is estimated to cost approximately $5 million. Having already spent $3 million in legal fees, Beaver Lake determined it could not afford to pay more and applied to the ABQB to request advance costs.

An award of advance costs is a last resort measure used by courts to enable public interest cases to proceed. The test for advance costs requires the applicant:

(1) demonstrates impecuniosity – meaning, the applicant “genuinely cannot afford to pay for the litigation;”
(2) presents a prima facie meritorious case; and
(3) raises issues of public importance (para 11; as set out in British Columbia (Minister of Forests) v Okanagan Indian Band, 2003 SCC 71).

Although finding Beaver Lake had unrestricted access to $3 million, the trial judge determined the Nation met the test for impecuniosity because it required those funds to meet other needs of its impoverished community. The trial judge ordered Canada, Alberta and Beaver Lake to each contribute $300,000.00 annually to the Nation’s litigation costs. The Alberta Court of Appeal reversed this order holding there was insufficient evidence to demonstrate Beaver Lake couldn’t pay. Beaver Lake appealed to the SCC.

Unanimous Decision

At issue on appeal was how a First Nation government, which has unrestricted funds but asserts these resources are earmarked for other pressing needs, can demonstrate impecuniosity. The Court first outlined the two principles – reconciliation and access to justice – which underly the advance costs analysis with respect to section 35 litigation. With these two principles in mind, the Court considered how to assess impecuniosity.

The Court affirmed a First Nation government may be impecunious “where it cannot meet its pressing needs while also funding the litigation” (para 40). While emphasizing the high threshold to meet impecuniosity, the Court clarified that “pressing needs” do not mean the “bare necessities of life” (para 4). Rather, reconciliation requires courts “to consider the “pressing needs” from the perspective of a First Nation government applicant that sets its own priorities and is best situated to identify its needs” (para 44). The Court established that in determining impecuniosity, a judge must be able to

(1) identify the First Nation applicant’s pressing needs;
(2) determine what resources are required to meet those needs;
(3) assess the applicant’s financial resources; and
(4) identify the estimated costs of funding the litigation (para 5).

Applying this four-part analysis to the case at hand, the Court found that while Beaver Lake did have pressing needs, there was insufficient evidence to determine the other three factors. As a result, the Court remitted the matter to the ABQB for reconsideration.

Take Away

There are good reasons why this case should be considered a victory for First Nations litigants. The Court’s use of a contextual approach that considers the unique situation of First Nation governments pursuing Aboriginal rights and title litigation, and its requirement that “pressing needs” be determined from the First Nation government’s perspective, reflect the Court’s commitment to ensuring its decisions are guided by the principles of reconciliation.

Still, the case sets out strict requirements for First Nation litigants seeking costs in advance. The Court makes it clear that the onus is on the First Nation applicant to prove it genuinely cannot afford to pay for litigation because it needs to use its funds for other pressing needs. Expanding on this point, the Court provides an extensive list of evidentiary requirements an applicant must meet to establish they have insufficient funds to pay for litigation. Meeting these requirements will be expensive and time consuming. The evidentiary hurdles are meant to strike a balance between reconciliation and the need for respecting the separation of powers. However, in the context of First Nation governments applying for assistance from the courts because they cannot afford the legal fees needed to uphold their rights, these onerous requirements may create a new set of barriers.