Supreme Court Provides Welcome Clarity on the Honour of the Crown in Contracts

November 29, 2024

Treaty One Territory, Manitoba

AMC Communications

Treaty One Territory, Winnipeg – The Assembly of Manitoba Chiefs (AMC) responds to the Supreme Court of Canada’s decision in Quebec (Attorney General) v. Pekuakamiulnuatsh Takuhikan, released on November 27, 2024.

This case involved contracts between the Pekuakamiulnuatsh First Nation’s Band Council and the Governments of Canada and Quebec to establish and fund the First Nations-managed police force. Canada and Quebec initially agreed to provide inadequate funding to maintain the police force. The First Nation was forced to assume a nearly $1.6 million deficit to keep the service alive when Quebec and Canada refused to renegotiate the agreements.

Pekuakamiulnuatsh Takuhikan sued Canada and Quebec, arguing that their refusal to negotiate violated their obligations under contract and the Crown’s duty to act honourably. The Quebec Court of Appeal ordered Canada and Quebec to pay the deficit. Although Canada eventually paid its share, Quebec appealed that decision to the Supreme Court. Yesterday, the Supreme Court ruled that by refusing to negotiate, Quebec did not act in good faith or uphold the honour of the Crown.

The AMC, represented by Nick Saunders, Norway House Cree Nation, and Carly Fox, Fox LLP, participated as an intervenor before the Supreme Court. The AMC argued that the Crown’s sui generis fiduciary duty towards First Nations—a duty that can independently trigger a lawsuit—exists whenever the Crown has assumed discretionary control over an area concerning an interest related to First Nations’ broad, inherent right to self-government. As such, First Nations should be able to protect their self-government rights when the Crown impacts their sovereignty, regardless of whether a contract exists.

Regrettably, the Supreme Court did not address the issue of sui generis fiduciary duties in its decision. Instead, it opted to resolve the dispute by refining the law regulating the Crown’s contractual dealings with First Nations. In its decision, the Supreme Court clarified that the Crown must act honourably in contractual relationships with First Nations that arise because of issues that concern a First Nations’ right to self-government.

The AMC welcomes this increased clarity on situations in which the honour of the Crown applies to contracts. It also applauds the Supreme Court’s recognition that the Crown must be especially honourable in contracts that involve self-government rights and that self-government rights do not need to be recognized by a Canadian government or court to receive protection.

Following the decision, Acting Grand Chief Betsy Kennedy welcomed the ruling while calling for stronger recognition of First Nations sovereignty, “I congratulate Pekuakamiulnuatsh First Nation for this important victory enabling them to maintain and manage their own police service. Adequate and sustained funding, particularly for policing, is essential to First Nations. It is reassuring to see that the Supreme Court recognizes the need to hold the Crown to a higher standard when contracting with First Nations on self-governance issues. This is especially necessary given the Crown’s long history of dishonourable relationships with First Nations.”

“While it is disappointing that the Supreme Court did not take this opportunity to address the scope of the Crown’s fiduciary duty to First Nations, this decision comes at a critical time, as many First Nations people across Canada continue to face systemic racism, discrimination and violence within the policing system. In recent years, numerous First Nations individuals have lost their lives during interactions with police, underscoring the urgent need for community-led solutions. First Nations policing is essential not only for ensuring culturally informed and accountable public safety but also for rebuilding trust and protecting the lives of First Nations people. Adequately funded, self-managed police services empower First Nations to uphold safety and justice in ways that reflect their values and priorities while addressing the failures of colonial policing systems,” concluded Acting Grand Chief Betsy Kennedy.

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For more information, please contact:

Communications Team
Assembly of Manitoba Chiefs
Email:  media@manitobachiefs.com 

About the Assembly of Manitoba Chiefs

The AMC was formed in 1988 by the Chiefs in Manitoba to advocate on issues that commonly affect First Nations in Manitoba. AMC is an authorized representative of all 63 First Nations in Manitoba with a total of more than 172,000 First Nations citizens in the province, accounting for approximately 12 percent of the provincial population. AMC represents a diversity of Anishinaabe, Nehetho / Ininew, Anisininew, Denesuline, and Dakota Oyate peoples.