On December 2, 2014, the Yukon Supreme Court struck down the Yukon government’s Peel watershed regional land use plan because of the government’s failure to follow the process for developing that plan under final agreements (modern treaties) with the Na-Cho Nyak Dun, Tr’ondek Hwech’in and Vuntut Gwichin First Nations. The case marks the first time that a court has been asked to consider the meaning of land-use planning provisions contained in the Umbrella Final Agreement between Canada, Yukon and Yukon First Nations, which forms part of eleven final agreements across Yukon. Among other things, the final agreements provide First Nations with the right to participate in land and resource management decision-making processes for Crown lands, including land use planning processes, in exchange for the release of claims to Aboriginal rights or title to those lands.

While the decision deals specifically with the Peel watershed in northeast Yukon, the case will have direct implications for land use planning throughout the Yukon, and could have indirect impacts on consultative requirements under modern treaties for other governmental land and resource use decision making.

The Peel watershed is a vast area covering 14% of Yukon. While it is almost entirely undeveloped and there are no mines in the area, as of summer 2011, there were nearly 8,500 active mining claims in the area. The area is considered to harbour a large portion of the Yukon’s oil and gas potential.

In 2004, the Peel watershed regional planning commission was established under the relevant final agreements to develop a regional land use plan for the Yukon portion of the Peel watershed. The mandate of the Commission was limited to land use planning for the Yukon, however, the final agreements all made provision to protect the interest of the Tetlit Gwich’in who live in the Northwest Territories but have traditional territory in the Yukon.

As set out in the judgment, land use planning under the final agreements follows six basic steps:

Following years of background work and information gathering from First Nations, government and the general public, the Commission proposed a land use plan for the Peel watershed and recommended it to the government under Step 1. Under Steps 2 and 3, the government proposed modifications to the Plan and sent it back to the Commission. Under Step 4, the Commission then made some modifications and resubmitted the “Final Recommended Plan” back to the government. The controversy in the case arises from what the government did with the Plan after receipt of the Final Recommended Plan.

After receipt of the Final Recommended Plan, the government introduced further changes to the Plan beyond those it raised at Step 3, and approved a final Plan that, among other things, opened 71% of the Peel watershed for mineral exploration with 29% protected, compared to 80% protected and 20% open for mineral exploration under the Final Recommended Plan.

The Yukon government’s position was that the final agreement gave it the final word on approving a plan on non-settlement lands. The First Nations argued that the government had gone off on a “frolic of its own” and essentially replaced the Final Recommended Plan with its own plan, contrary to the consultative process set out in the final agreements.

The Court specifically emphasized that its role was not to determine whether more or less protection for the Peel watershed is appropriate. Rather, its job was to interpret whether the planning process envisioned in the final agreements had been followed. The overriding issue, as stated by the Court, was “whether the Government of Yukon acted honourably and interpreted its constitutional obligations under the Final Agreements broadly and purposively rather than narrowly, divorcing the words of the Final Agreements from their purpose.”

In drawing on previous jurisprudence from the Supreme Court of Canada in Little Salmon/Carmacks and Manitoba Metis, including direction that modern treaties must be interpreted in a manner that fosters a positive long-term relationship between First Nations and government as well as between Aboriginal and non-Aboriginal communities, the court concluded that the process adopted by the Yukon government to enact the plan was not based upon a contextual interpretation of the final agreements, nor did it enhance the goal of reconciliation. In the words of the Court, “It was an ungenerous interpretation not consistent with the honour and integrity of the Crown”, resulting in the government usurping the Commission’s role and the planning process by introducing new land use planning tools and concepts at the final stage of the process.

As a result, the Court quashed the Yukon government’s approved plan, and directed that the government return to Step 5 and consult on the Final Recommended Plan. As much of the consultative process had already been undertaken and the government already had an opportunity to make submissions at Step 3 of the process, the Court held that, should the Yukon government wish to make any modifications to the Final Recommended Plan, it would have to do so in a manner consistent with its initial comments provided at Step 3.

While the decision does not challenge the Yukon government’s ultimate power to make decisions regarding management and use of Crown lands in the Yukon, it reminds governments – and project proponents relying on authorizations given by governments – that treaty rights contained in modern land claim agreements are to be given a large and liberal interpretation consistent with the objectives of the treaty and in a manner that upholds the honour of the Crown.  Proponents – particularly in the north where many modern treaties have been entered into – are reminded that treaty rights can apply to Crown lands and that First Nations may have a right to participate in decision-making for the management of public lands and resources.  The decision is yet another in a line of cases showing that courts will not allow governments to take a narrow, restrictive view of their obligations under modern treaties, and will step in where they feel that government actions are not consistent with the honour of the Crown.  Project proponents and governments must therefore pay close attention to any applicable treaties in areas where they wish to work and must ensure that the processes set out in the treaties are being observed in a manner that reflects ongoing Aboriginal interests in decisions affecting Crown lands within their traditional territories.