Thursday, 28 June 2012

The Tsilhqot'in Decision -- Immediate Thoughts

The British Columbia Court of Appeal rendered its judgment in the Tsilhqot'in decision.  There will undoubtedly be enough papers published about this decision to support the forest industry for years to come, but, just for the use of those of you out there who want the initial half baked thoughts of the one of the participants, here goes.  These thoughts are not an analysis of the case -- that will follow but more in the nature of birds-eye view comments about where this decision takes us and where it will likely go.


First, the Court of Appeal is clearly throwing down the gauntlet to the Supreme Court of Canada in this decision and, in essence, saying "you tell us what you really mean by aboriginal title."  It is difficult to read this decision without getting the strong sense that the Court of Appeal believes that the Supreme Court of Canada has done everyone a disservice by not really telling us much about what they see the extent of aboriginal title being.  Justice Groberman clearly sees this uncertainty as serving no-one's purposes:




[161]     To some degree, the apparent reluctance of the courts to go beyond what is needed to resolve the specific cases is understandable. I have already noted that that is the traditional manner in which the common law has developed. Further, the stakes in Aboriginal title claims have been high – cases such as Calder, Delgamuukw, and Marshall; Bernard involved vast areas of land. The resolution of such claims can be critical to the future of both the First Nation involved and the broader Canadian population.


[162]     The technical difficulty of this area of law has exacerbated the problem, and has led to considerable frustration. The efforts of the Nisga’a in Calder, the Gitksan and Wet’suwet’en in Delgamuukw, and the Tsilhqot’in in this case (to this point) all consumed enormous amounts of resources, only to have the cases end inconclusively due to problems with the way they were commenced or pleaded.


[163]     The courts have frequently emphasized the need for resolution of Aboriginal rights and title issues through negotiated agreements where possible. The trial judge in this case went beyond the ordinary role of the court in attempting to set the stage for a negotiated resolution. Negotiated resolution of issues, however, is not facilitated by uncertainty in the law.


[164]     It is apparent that all sides have attempted to resolve the issues in this case, but without success. That is not surprising, given that the theories of Aboriginal title espoused by the plaintiff, on the one hand, and the defendants, on the other, are as far apart as they are. The trial judge’s decision to provide a non-binding opinion as to the title area did not, in the end, assist the parties in finding common ground.


In this comment there is much truth:  it is really a scandal that both Calder and Delgamuukw ended in uncertainty flowing from procedural, technical or evidentiary  errors.  It would have only made the law look even more discreditable if the Tsilhqot'in case had ended the same way.  There are many who say that the lawyers are the only real winners in aboriginal litigation and that view would certainly have been reinforced if the Court of Appeal had not come to grips with the issues.


Second, the Court of Appeal clearly takes the view that aboriginal title is a limited right with a modest (I would say close to non-existent) role to play in the process of reconciliation but views non-title aboriginal rights as being far more robust and significant for this purpose.  Justice Groberman's dismissive view of aboriginal title as a significant right is best seen in the examples he cites of where aboriginal title may exist outside of village sites or cultivated fields:


[221] In particular, I note that the examples of title lands given at para. 149 of Delgamuukw are well-defined, intensively used areas. The reference to hunting, fishing and other resource extraction activities is coupled with a specific description of the lands so used as “definite” tracts of land. I agree with British Columbia’s assertion that what was contemplated were specific sites on which hunting, fishing, or resource extraction activities took place on a regular and intensive basis. Examples might include salt licks, narrow defiles between mountains and cliffs, particular rocks or promontories used for netting salmon, or, in other areas of the country, buffalo jumps.
This definition seems to completely move past the word "tract" that was used in Delgamuukw and place the whole focus on the concept of "definite".  In plain English a "tract" generally means an "extended area of land" and is synonymous in some contexts with concepts such as a "district" or "region".  I suspect that most copy editors would have some difficulty in accepting without comment the use of the word "tract" to describe a salt lick or rock.   


If this is was what the Supreme Court of Canada meant by aboriginal title in Delgamuukw it is hard to see what they were doing sending the matter back to trial.  The plaintiffs in Delgamuukw clearly did not have this in mind in their pleading and the trial judgment likely would have happily conceded such places to them (save for the trial judge's view of extinguishment) and moved on.  The Gitxsan certainly would not have wanted to go back to trial to figure out their rights to the salt licks in their territory.


Third, the governments may come to regret this victory.  To date the governments have been concerned about aboriginal title because of the fact that they have viewed it as a more robust right than typical aboriginal harvesting rights.  In the eyes of the government as long as the Indians can hunt moose somewhere infringements of hunting rights will be easily justified.  The Court of Appeal takes a different view and appears to be determined to hold the Province to a much higher standard and to give much greater substance to the entire bundle of rights held by an aboriginal people.  Justice Groberman says:


[235] It seems to me that the plaintiff’s approach to Aboriginal title does not account for the fact that title is not the only tool available to provide cultural security to the Tsilhqot’in.
[236] Aboriginal rights of various sorts protect cultural security and safeguard the ability of First Nations to continue to engage in traditional lifestyles. Indeed, as British Columbia points out, the phrase “cultural security and continuity” was originally used in Sappier; Gray to describe the function of Aboriginal rights in general, not merely Aboriginal title.
[237] Aboriginal title, while forming part of the picture, is not the only – or even necessarily the dominant – part. Canadian law provides a robust framework for recognition of Aboriginal rights. The cultural security and continuity of First Nations can be preserved by recognizing their title to particular “definite tracts of land”, and by acknowledging that they hold other Aboriginal rights in much more extensive territories.

On the whole this is still a major step backwards towards the "bundle of rights" theory rejected by the Supreme Court of Canada in Delgamuukw but aboriginal people should test the Court on this invitation to look to more extensive aboriginal rights to protect their cultural sovereignty.  These rights need not be limited to pure "harvesting" rights.  For example, why should an aboriginal people who consistently excluded others from their territory prior to and at 1792 not be able to assert an aboriginal right to exclude others (even if they cannot prove the occupancy necessary to found the Court of Appeal's impoverished view of aboriginal title).  In this respect it is worth noting that the aboriginal people of the prairies and the Northwest Territories have been very successful in advancing their interests without recourse to aboriginal title.

Finally though this note of optimism has to be tempered by the fact that the Court of Appeal sends and explicit and disheartening message about the project of reconciliation and the recognition of aboriginal rights and aboriginal title -- namely that it is a project that is only really worth pursuing to the extent that it does not make vested non-aboriginal interests uncomfortable:

[239] It seems to me that this view of Aboriginal title and Aboriginal rights is fully consistent with the case law. It is also consistent with broader goals of reconciliation. There is a need to search out a practical compromise that can protect Aboriginal traditions without unnecessarily interfering with Crown sovereignty and with the well-being of all Canadians. As I see it, an overly-broad recognition of Aboriginal title is not conducive to these goals. Lamer C.J.C.’s caution in Delgamuukw that “we are all here to stay” was not a mere glib observation to encourage negotiations. Rather, it was a recognition that, in the end, the reconciliation of Aboriginal rights with Crown sovereignty should minimize the damage to either of those principles.
For aboriginal people the whole Section 35 project and the idea of reconciliation is only meaningful if it is likely to result in substantial positive change in the circumstances of aboriginal people. If this is limited -- even in areas of Canada that are largely uninhabited by non-aboriginal people -- to legal concepts and rights that do not interfere with Crown sovereignty or the "well-being" of Canadians then it is unlikely this idea of reconciliation is going to appeal to many aboriginal people.  Instead it is likely to reinforce the idea prevalent in aboriginal communities that ideas such as aboriginal rights, aboriginal title and reconciliation are empty phrases primarily designed to allow non-aboriginal people to feel redeemed and righteous about their own conduct and institutions.

Wednesday, 13 June 2012

The Tax Exemption a Year After Bastien

It has been about one year since the Supreme Court of Canada released its decision in Bastien Estate v. Dube, 2011 SCC 38, [2011] 2 SCR 710 and we now have some indications as to how the lower courts are applying this decision.  As expected, the result of this decision has generally been a more pragmatic openness to applying the tax exemption to protect income being earned by Indians who are based on the reserve and carrying undertakings that have some meaningful overlap with the reserve.  On the other hand, these decisions have not changed the status of employment arrangements that appear to be simply designed to move "off-reserve" work on reserve.  This development is consistent with the nature of the Supreme Court of Canada's decision, which really marks more of a change in the tone of the law rather than a radical re-working of the test.  The Williams test still stands as the test to be applied, but it is no longer dominated by concerns about the commercial mainstream.

The most important decisions showing this more expansive approach  in the wake of Bastien are Canada v. Roberts 2012 FCA 94 and Ballantyne v. Canada 2012 FCA 95 together with the similar tax court case, McDonald v. The Queen, 2012 TCC 437.  Each of these cases either directly or indirectly concerned the question of where income from fishing carried out from a reserve base should be treated as being situated for the purpose of the s. 87 tax exemption (note McDonald was an employment insurance case but following Williams this requires an analysis of the status of the underlying income that gave rise to the employment insurance benefits).  As is typical in these cases there is a laundry list of factors that link the income either to the reserve or tend to disconnect it from the reserve (for example, the fish are all caught off-reserve but the boats are launched from the reserve but the fish are sold to an on-reserve co-op but the co-op's customers are off-reserve).  In all three cases the courts arrived at the conclusion that there was sufficient connection to the reserve to situate the income on-reserve and so attract the protection of s. 87.  What is notable in each case there is a near absence of a "commercial mainstream" analysis such as that that dominated the law after the Recalma decision. 


By contrast in Marcinyshyn v. The Queen, 2011 TCC 516 the Tax Court continued to reject the National Leasing approach to trying to move off-reserve social services earned income on-reserve through creative structuring of the employment relationship.  The Court in this case continued the pattern established in earlier cases such as Shilling where the court declined to find that the facts that the employer was situated on reserve and the work was for the benefit of an aboriginal population sufficed to put the income on-reserve where the services were predominantly delivered at urban locations situated far from any reserve.


The Federal government has filed leave to appeal applications in the Robertson and Ballantyne cases.  From the perspective of the Federal government these cases appear to give weight to fact that the fishing was occurring on traditional territory and/or was connected to traditional fishing practices.  Thus, the government argues, the Federal Court of Appeal erroneously moved away from a focus on whether the income was on or off reserve to an analysis of whether the income was tied to the traditional way of life in some fashion.  In effect, the government argues, the Federal Court of Appeal has now completely reversed the Recalma analysis and moved toward a position that considers whether or not the income is in some way "traditional" and, if such a link can be made at all, gives that link predominant weight, even if the actual income involves sale into the commercial mainstream.


In fact however this does not actually appear to be what the Federal Court of Appeal is doing.  What is really happening in these cases is an attempt by the Federal government to introduce into the s. 87 test a requirement that the income be "predominantly" on-reserve.  That is, in order for income to attract the s. 87 tax exemption it must be show that it has a greater connection to the reserve than to off-reserve lands.  The difficulty with this approach is that this runs against the wording of s. 87 (which does not require on its face that the income be "exclusively" or "predominantly" on-reserve) and the larger principle that ambiguous phrases should be interpreted in favour of the aboriginal people.  Looked at grammatically it is entirely reasonable to say that income can be related to both reserve and non-reserve lands and can therefore be viewed as being "on" both.  Once this determination is made the income satisfies the test for the application of the s. 87 exemption (that is, it is "on" reserve) and the exemption should apply.

Province Moves Quickly to Repeal Tax Exemption

Last month the Musqueam won an interesting case that held that certain rural lands held for Indian bands were tax exempt under Provincial law.  The province has now responded by repealing part of the exemption significantly narrowing its reach by s. 86 of the Budget Implementation Bill, 2012.

Pity they do not act as quickly to solve other aboriginal problems.