The Supreme Court of Canada (SCC) released its decision in the case Ontario (Attorney General) v. Restoule on Friday, confirming that the Crown is required to negotiate and, failing agreement, compensate First Nations groups for breaching treaty obligations.

The case considered the interpretation of treaties signed between the Anishinaabe of Lake Huron and Lake Superior and the Crown in 1850, when those areas were part of the British colony of Canada West (now Ontario) prior to Canadian confederation in 1867. In return for ceding their land, the Indigenous beneficiaries were to receive payments in perpetuity. The payments were to increase when the ceded land is used for production. The treaty capped the payments required by the Crown to each member at around $4 per year. However, the Crown had the capacity to increase the payments. The two Anishinaabe groups each sought a declaration that the Crown must increase its payments.

The SCC held that, in accordance with the Crown’s fiduciary duty, it must consider raising its treaty payments from time to time. In Canadian law, the doctrine of a Crown fiduciary duty towards First Nations groups was discussed first in Guerin v. The Queen. In that case, the SCC described the fiduciary duty as a “sui generis” relationship arising from the Crown’s discretionary power. Since the Canadian government has discretion in land matters, the SCC imposes an obligation to “administer the ceded land on behalf of the treaty beneficiaries.” The government must exercise its discretion in line with “the honour of the Crown.” In other words, even if the Crown technically has discretion in an agreement, it is constrained to act honourably.

According to the Court, the government’s failure to increase the payments since 1875 was “egregious,” breaching their fiduciary duty. Hence, the Court confirmed a duty to negotiate compensation with the groups in question. The Crown reached a negotiated settlement with a group from Lake Huron, and is currently negotiating with the Lake Superior group. If the Crown cannot reach a negotiated settlement within six months, they must exercise discretion to “compensate the Superior plaintiffs.”

The decision affirms that the Canadian Government does not have absolute discretion to determine how it lives up to Treaty promises.