Case: Canadian Natural Resources Limited v. Fishing Lake Métis Settlement, 2024 ABCA 131 (CanLII)

Keywords: administrative discrimination; Indigenous taxation

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The Appellants own and operate businesses on the Fishing Lake Métis Settlement. The Métis Settlements General Council (“General Council”) adopts assessment and taxation policies which treat Settlement members and Settlement member-owned corporations differently from that of non-Settlement members and corporations, including the Appellants. Without consultation or notice, the Appellants “form the entirety of Fishing Lake’s property tax base, and each experienced a significant increase in their property tax liability to Fishing Lake.” (See para. 1).

The Appellants challenge these policies as ultra vires the General Council’s power or authority. The General Council says discriminatory tax treatment is “implicitly authorized” in the Métis Settlement Act, RSA 2000, c M-14 and, therefore, lawful. (See para. 2). The Chambers Judge (Hayes-Richards J.) agrees with the General Council. Applying the reasonableness standard of review, the Chambers Judge concludes the policies are a “reasonable exercise of the General Council’s delegated authority” and that no procedural fairness was owed to the Appellants when passing the policies. (See para. 3).

The Court of Appeal (Rowbotham, Pentelechuk, and Feehan JJ.A.) allows the appeal, finding the General Council’s tax policies constitute administrative discrimination which is not authorized by the Métis Settlement Act. (See para. 84).


As succinctly stated by the Court of Appeal, “this appeal engages the concept of discrimination in an administrative law sense, which is permissible provided the discrimination is not beyond the General Council’s powers or authority as defined by its enabling statute”. (See para. 4).

For the Court of Appeal, administrative discrimination is “fundamentally different than discrimination in a human rights context”. Here, discrimination “encompasses distinctions…even if ‘conceived and imposed in good faith, without favouritism or malice’”. (See para. 22; Montréal v. Arcade Amusements Inc, 1985 CanLII 97 (SCC) at p. 400).

The Court of Appeal determined that subordinate legislation, including the General Council’s tax policies, is ultra vires not simply because it is discriminatory, but because the creation of the distinctions is not authorized by statute. (See para. 23; Shell Canada Products Ltd v. Vancouver (City), 1994 CanLII 115 (SCC) at p. 259).

Importantly, this appeal was decided in the shadow of TransAlta Generation Partnership v. Alberta (Minister of Municipal Affairs), 2022 ABCA 381 – which is being argued before the Supreme Court of Canada this week, on April 25, 2024. The Chambers Judge in this case identified “reasonableness” as the standard of review applicable to the General Council’s authority under Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65. The Appellants accepted that standard. The General Council, however, argued that the Court of Appeal should apply the so-called “hyper-deferential review” method from Katz Group Canada Inc v. Ontario (Health and Long-Term Care), 2013 SCC 64. (See paras. 24-27).

The Court of Appeal skillfully avoided picking a side, observing instead that both standards ask “essentially the same question” – is the discrimination authorized by the enabling legislation, expressly or by necessary implication, thereby meeting the common law test? (See para. 29). For the Court of Appeal, if the common law test permits administrative discrimination by necessary inference, the legislation must be carefully examined to determine that necessary inference. (See para. 30).

As noted by the Court of Appeal, there is a “general rule” that discrimination can be authorized expressly or implicitly. (See para. 32 citing Allard Contractors Ltd v. Coquitlam (District), 1993 CanLII 45 (SCC) at p. 413). Following the “modern test for authorizing administrative law discrimination”, the Court of Appeal found that this general rule applied equally in the context of taxation – that it is “no longer the law that a power to discriminate in taxation must be expressly authorized”. (See paras. 33-38). Accordingly, the Court of Appeal determined that the Chambers Judge did not err in allowing that administrative discrimination can be implicitly authorized in matters of taxation. (See para. 49).

So, to what extent does the Métis Settlement Act authorize discrimination? For the Chambers Judge, the Act “rebuts the presumption of equal treatment” – the “ameliorative” nature of the Act, its entire purpose, is to differentiate between classes of people (i.e., Settlement vs. non-Settlement members and member owned companies). (See para. 51). The Court of Appeal rejected that conclusion for three principal reasons:

  1. she “concluded that the ameliorative nature of the [Métis Settlement Act], in and of itself, was sufficient to rebut the presumption of equal tax treatment”;
  2. the Chambers Judge “failed to address the common law rule and the jurisprudence as to when it is permissible to find ‘authority to discriminate by necessary implication’”; and
  3. she concluded that “taxation in the Indigenous context operates as a separate paradigm from common law principles of formal equality and horizontal equity’”. (See para. 52).

For the Court of Appeal, these errors led the Chambers Judge to “interpret the purpose of the [Métis Settlement Act] too broadly, thereby skewing the analysis”. (See para. 52).

The Court of Appeal found that, while it is true that the Métis Settlement Act facilitates the power of taxation, “self-government is not in itself a license to discriminate”. (See para. 61). The ameliorative nature of the Act does not confer “unlimited power to the General Council” – rather, the Court of Appeal noted that “a cautious approach must be engaged” and that “[i]f the Legislature wanted to create such a broad avenue bypass in such cases, it would have said so…the Legislature does not hide elephants in mouseholes.” (See para. 70; Sedgewick v. Edmonton Real Estate Board Co-Operative Listing Bureau Limited (Realtors Association of Edmonton), 2022 ABCA 264 at para. 75). Regarding the treatment of Indigenous taxation policy as a “separate paradigm”, the Court of Appeal made the following statement:

In conclusion, there is no blanket Indigenous tax exemption. While there are historical and constitutional elements to the issue of Indigenous taxation, courts have rigorously and consistently limited the exemption to the terms of s 87 of the Indian Act. Section 87 does not cover Métis people or Métis Settlements, and no equivalent tax-exempting provision exists in any federal or provincial legislation, including the [Métis Settlement Act]. (See para. 78).

In this case, the Court of Appeal found that the Chambers Judge erred in finding the Métis Settlement Act implicitly authorized discriminatory tax treatment and that the impugned provisions were ultra vires. Importantly, however, “[i]t remains open to the Legislature, however, to amend the [Act] to explicitly authorize such treatment.” (See para. 81).

Finally, the Court of Appeal briefly concluded that the General Council had a duty to notify the Appellants and that the failure to do so “amounted to a breach of procedural fairness” – an alternate basis to set aside the taxation policies in question. (See para. 82). Of interest, the Court declined to address the import of the “general rule that legislative bodies do not need to give notice before acting”, leaving the resolution of that issue to another day. (See para. 83; Authorson v. Canada (Attorney General), 2003 SCC 39 at paras. 37-39).

Counsel for the Appellants: Gibert Ludwig, K.C. and Aimee Louie (Wilson Laycraft Barristers & Solicitors, Calgary)

Counsel for the Respondent, Fishing Lake Métis Settlement: G. K. Epp

Counsel for the Respondent, Métis Settlements General Council: A. Clarke and L. Haynes

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