The Supreme Court of Canada Decides Ross River - The Intention-Based Approach to Reserve Creation

The Supreme Court of Canada's judgment in the Yukon case of Ross River Dena Council Band v. Canada [2002] S.C.J. No. 54 is helpful to First Nations here in British Columbia who want to defeat the provincial government's "late reserve creation" argument. This is the argument that Indian reserves were not created and given Indian Act protections when they were set apart but rather at some later date, typically stated to be 1938 when the Province transferred its interest in reserve lands to the federal government.

The land at issue in the Ross River case was an Indian village site of the Ross River Band. The First Nation argued that this village site was a "reserve" for the purposes of the Indian Act tax exemption. The Crown agreed that there was a village, but argued that this village had never been established as a reserve within the meaning of the Indian Act. This dispute required the Supreme Court to examine what steps were necessary to create a reserve in the Yukon. The Justices of the Court held that the question of whether or not a site has been reserved for the purposes of the Indian Act requires an "intention-based", "fact-sensitive" approach.

The Court confirmed that Indian reserve in Canada were created by various methods at various times. Whatever method was used, the creation of a reserve involved both an action (the setting apart of land) and an intention (land set apart to be for the use and benefit of Indians).

The Court concluded that in order for a reserve to be established, Crown agents having sufficient authority to create a reserve (or reasonably understood by the Indians as having such authority) must have had an intention to create a reserve and taken steps to set aside land for the benefit of Indians.

The Court applied this test to the village of the Ross River Band and held that although the lands had been set apart for the Band, there had been no intention by Canada to create a reserve. The village site therefore was not a reserve for the purposes of the Indian Act and the tax exemption under that statute.

Although the First Nation failed to establish reserve creation on the particular facts of the case, the Supreme Court's decision will be helpful to other First Nations both in negotiation and litigation. The Court's focus on the intention of the Crown will help to defeat any technical arguments that the Crown may raise to argue that a reserve did not exist at law when everyone (including the Crown) thought that it did.

Finally, the Court made some valuable comments on the scope and nature of Canada's fiduciary obligation to First Nations:

"The question arises in both cases as to whether the powers of the Governor in Council must be exercised personally or if those powers may be delegated to a government official. As the intervener Coalition of B.C. First Nations submits, one must look both at the Crown and Aboriginal perspectives to determine on the facts of a given case whether the party alleged to have exercised the power to create a reserve could reasonably have been seen to have the authority to bind the Crown to act to appropriate or set apart the lands and then to designate them as a reserve. In my view, the correct test of this is to be found in this Court's judgment in R. v. Sioui, [1990] 1 S.C.R 1025, at p. 1040.

To arrive at the conclusion that a person had the capacity to enter into a treaty with the Indians, he or she must thus have represented the British Crown in very important, authoritative functions. It is then necessary to take the Indians' point of view and to ask whether it was reasonable for them to believe, in light of the circumstances and the position occupied by the party they were dealing with directly, that they had before them a person capable of binding the British Crown by treaty" [Para. 64].

This comment is a powerful response to those who wish to limit or minimize the ambit of the fiduciary obligations of the Crown.