The role of the honour of the Crown in Crown-Indigenous contractual relationships is evolving, with the Supreme Court of Canada’s 2024 decision in Quebec (Attorney General) v Pekuakamiulnuatsh Takuhikan setting significant precedents
This case is the first to recognize that the honour of the Crown imposes a duty of “honour and integrity” on the Crown in its implementation of certain contractual obligations to Indigenous Peoples. This case also redefines the approach to remedies for breaches of the honour of the Crown, which must be based in “reconciliatory justice” and aimed at crafting creative solutions to restore the Crown’s honour and foster reconciliation.
- Background
The Pekuakamiulnuatsh Takuhikan (the “Nation”) brought a claim against Canada and Quebec for the breach of the honour of the Crown arising from tripartite policing agreements between the parties. Under these agreements, Canada and Quebec were responsible for ensuring that the Nation had sufficient funding to continue operating and maintaining its Indigenous police force in Mashteuiatsh, Quebec. The agreements also had a renewal option. The Nation sought the reimbursement of funds that it had to pay as a result of Canada and Quebec’s underfunding of the Nation’s Indigenous police force. The tripartite agreements operated between 2013 and 2017. At the end of each fiscal year, the police force incurred an operational deficit that was not the result of any mismanagement or extraordinary expenses.
The Quebec Court of Appeal ordered Canada to pay the Nation the amount of $832,724.37 for its share of the funding shortage under the tripartite agreements. The Court of Appeal ordered Quebec to pay the Nation the amount of $767,745.58 for its share of the funding shortage. The appeal before the Supreme Court of Canada (the “SCC”) concerned the amount that Quebec had to pay to the Nation.
- Summary of SCC Decision
The SCC ruled that the honour of the Crown only applies to the performance of contracts between the Crown and Indigenous groups where the contract in question is “intended to foster the modern-day reconciliation of pre-existing Indigenous societies with the Crown’s historic assertion of sovereignty”.[1]
The SCC established two requirements for the honour of the Crown to apply to contracts between the Crown and an Indigenous group:
(1) the contract must be entered into by the Crown and an Indigenous group by reason and on the basis of the group’s “Indigenous difference”; and
(2) the contract must relate to an Indigenous right (such as the right to self-government), whether the right is established or the subject of a credible claim.[2] It is not necessary for the Indigenous right to be established, it is sufficient for a credible claim to engage the honour of the Crown.[3]
Regarding the first requirement, the SCC concluded that since the tripartite policing agreements provided for the establishment and maintenance of an Indigenous police force, these agreements were entered into by reason and on the basis of the Nation’s “Indigenous difference”.[4] For the second requirement, the SCC determined that the agreements were entered into for the purpose of providing the Nation with a culturally appropriate police service managed by an Indigenous community. As such, the SCC ruled that the agreements were related to the Indigenous right of self-government.[5]
Ultimately, the SCC upheld the Court of Appeal’s decision and ruled that Quebec was required to pay the Nation $767,745.58 for its share of the funding shortage under the agreements. The SCC reasoned that although Quebec continued to renew the agreements, it did so in bad faith by knowingly providing insufficient funding to the Nation’s Indigenous police force. Quebec’s refusal to engage in genuine negotiations with the Nation regarding funding obligations had jeopardized the maintenance and operation of the Nation’s police force. For these reasons, the SCC held that Quebec’s performance of its obligations under the tripartite policing agreements constituted a breach of the honour of the Crown.
- Key Conclusions
Requirements for the Application of the Honour of the Crown to Contractual Agreements
For the honour of the Crown to apply to contracts between the Crown and an Indigenous group, two requirements must be met:
(1) the contract must be entered into by the Crown and an Indigenous group by reason and on the basis of the group’s “Indigenous difference”; and
(2) the contract must relate to an Indigenous right.
No Alteration of Contractual Terms
The SCC clarified that the honour of the Crown does not alter the terms of the contractual agreement between the Crown and the Indigenous group.[6] Rather, the honour of the Crown modifies how the obligations contained in the contract are performed by the Crown.[7] The SCC determined that in performing its contractual obligations, the Crown must act in a manner that fosters reconciliation between the Crown’s historic assertion of sovereignty and the pre-existing Indigenous groups.[8] The SCC also articulated that the honour of the Crown as it applies to contractual agreements, is only imposed on the Crown.[9]
Redefining the Approach to Remedies for Breaches of the Honour of the Crown
The SCC stated that the remedies for breaches of the honour of the Crown are intended to foster “reconciliatory justice”. The SCC explained that reconciliatory justice “is not intended only to compensate the Indigenous claimant for harm suffered as a result of past wrongs; it serves above all to restore and improve the relationship between the Crown and Indigenous peoples.”[10] The courts should strive to craft remedies that restore balance in the relationship between the parties, and restore the honour of the Crown.[11] In doing so, such remedies will foster reconciliation between the parties.[12]
- Discussion
Pekuakamiulnuatsh is significant because it expanded the scope of the honour of the Crown to the performance of contractual obligations, and not simply to contractual negotiations. Moving forward, Pekuakamiulnuatsh places additional onus on the Crown to ensure that it performs the contractual obligations owed to Indigenous Peoples in a manner that facilitates reconciliation.
Pekuakamiulnuatsh is also noteworthy because it has expanded the array of legal mechanisms in which Indigenous groups can challenge contractual agreements entered into with the Crown. This case also provides the courts with the ability to craft creative and flexible remedies in circumstances where the Crown has breached the honour of the Crown in its performance of contractual obligations.
Based on the requirement that the contractual agreement in question be related to reconciliation, the honour of the Crown likely applies to the following non-exhaustive types of Crown-Indigenous agreements:
- service agreements;
- policing agreements;
- headleases; and
- land stewardship agreements.
Please contact one of our lawyers at Whitelaw Twining if you have any questions.
Written by Tayla Basawa and edited by Simon Sigler
[1] Quebec (Attorney General) v Pekuakamiulnuatsh Takuhikan, 2024 SCC 39 at para 12.
[2] Ibid at paras 161, 163.
[3] Ibid at para 178.
[4] Ibid at para 173.
[5] Ibid at para 177.
[6] Ibid at para 188.
[7] Ibid.
[8] Ibid.
[9] Ibid.
[10] Ibid at para 18.
[11] Ibid at para 223.
[12] Ibid.
