Editor’s Note: This post was written as a preview of an upcoming Supreme Court of Canada decision for the Fantasy Courts website and newsletter.

This Week at the SCC

On Friday, July 16, 2021, the Supreme Court of Canada is releasing its decision in Southwind v. Canada. At issue is the calculation of compensation owed by Canada for breaching its fiduciary duty to Lac Seul First Nation by illegally flooding over 11,000 acres of their reserve lands for a hydroelectric project in 1929.

The Federal Court found that Canada breached its fiduciary duty and ordered a global award of $30 million. Lac Seul First Nation appealed the quantum of the award. The Federal Court of Appeal found the trial judge was right in not awarding compensation for the government’s failure to negotiate a revenue-sharing agreement. The Federal Court of Appeal did find the trial judge made some errors by using current expropriation law rather than 1929 expropriation law and by finding that Canada had no power to expropriate with respect to a comparable project. However, neither of these errors would have affected the outcome. Justice Gleason dissented with respect to the trial judge’s findings regarding the comparable project. She found that the trial judge’s errors in that regard would have affected the assessment of compensation.

At the SCC, Lac Seul First Nation argued that the courts below lost sight of the nature of Canada’s breaches and their devasting and permanent effects on Lac Seul First Nation. Canada argued that the courts below properly applied the principles of equitable compensation and made no errors warranting appellate intervention.

I’m leaning towards appeal allowed in part. I can’t imagine the recent heightened awareness regarding reconciliation is lost on the Supreme Court of Canada and this case could provide an opportunity to comment on the government’s approach to these types of claims. While the initial damage award is significant, it falls short of what Lac Seul First Nation would have received if they were treated fairly from the beginning. Dismissing the appeal could send the signal that it is easier (and cheaper) for the government to say sorry than to follow the law in the first place when it comes to Aboriginal rights.

Last SCC Decision

  • On June 30, 2021, the Supreme Court of Canada released its decision in Reference re Code of Civil Procedure (Que.), art. 35 about whether a change to the Quebec Code of Civil Procedure infringed on the constitutionally protected jurisdiction of superior courts. In 2016, the provincial government changed article 35 of the Code of Civil Procedure to raise the monetary value of cases that could be heard by the Court of Québec from $70,000 to $85,000.
  • In a close 4:3 split, the SCC dismissed the appeal and ruled that it was unconstitutional to raise the monetary value of cases that can be heard by the Court of Québec.
  • The limit up to $85,000 for the Court of Québec is too high when considered in its historical and institutional contexts. This grant has the effect of transforming the Court of Québec into a prohibited parallel court and therefore exceeds the limits established by s. 96 of the Constitution Act, 1867.
  • The purpose of s. 96 of the Constitution Act, 1867 is to give effect to the compromise reached at Confederation by protecting the special status of the superior courts of general jurisdiction as the cornerstone of Canada’s unitary justice system. The principles of national unity and the rule of law are central to this organization of the judiciary.
  • Chief Justice Wagner and Justice Rowe in dissent wrote that s. 96 should not be read so broadly so as to unduly limit the provinces’ ability to address complex and emerging legislative challenges related to the administration of justice. Justice Abella in separate dissenting reasons found that a grant of $85,000 of civil jurisdiction not only continues to respect the balance struck at the time of Confederation, but leaves superior courts with more civil jurisdiction than they had at that time.

-Tom Slade