The Crown's Fiduciary Duty Toward First Nations: Guerin v. The Queen

In an historic judgment, the Supreme Court of Canada in 1984 recognized the Crown's fiduciary relationship with First Nations. Guerin transformed the legal landscape, sending a clear message that the Crown would be held to a strict standard of utmost loyalty toward First Nations when dealing with First Nations' interests in land.

The case involved a lease entered into by the federal government on behalf of the Musqueam First Nation. The lease was for the Shaughnessy Heights Golf Course in south Vancouver. The terms of the lease were substantially less favourable than the terms the Musqueam had discussed with the Department of Indian Affairs when the Band agreed to surrender the land. The Musqueam sued the federal government for breach of trust.

The Supreme Court of Canada ruled that the government has a fiduciary relationship toward First Nations that is similar but not identical to a trust. What's more, the Crown's fiduciary duty toward First Nations can be legally enforced.

This fiduciary duty stems from the nature of the aboriginal interest in reserve lands. Reserve lands may not be alienated except to the Crown. Furthermore, the Indian Act gives the Crown discretion over how lands in which First Nations have an interest may be used. The Supreme Court of Canada decided that the Crown, because of its special position, must act with utmost loyalty toward First Nations when dealing with such lands.

The Crown failed in this duty when it signed a lease that did not adequately reflect either the discussions the Department of Indian Affairs had with the Musqueam First Nation or the value of the leased land. Ten million dollars in damages were awarded in favour of the Musqueam.

[Guerin v. The Queen, [1984] 2 S.C.R. 335]