SCC will hear Takuhikan v Procureur général du Québec: Implications for Indigenous Policing Funding and Crown-First Nation Contracts

Introduction

On October 5, 2023, the Supreme Court of Canada (SCC) announced that it will hear the appeal of a decision rendered on December 15, 2022 by the Quebec Court of Appeal that highlights significant legal developments directly impacting the funding of Indigenous policing services in Canada, and which may have broader implications for the interpretation of contracts between the Crown and First Nations generally.

The case, Takuhikan v Procureur général du Québec 2022 QCCA 1699, was an appeal brought by Pekuakamiulnuatsh Takuhikan (“Takuhikan”), a band council representing the Pekuakamiulnuatsh Innu First Nation. The dispute centres on funding under Canada’s First Nation Policing Program (“FNPP”) and the constitutional obligations of Quebec and Canada to adequately support Indigenous policing services.

Background: Tripartite Agreement and Funding Disputes

The FNPP aims to facilitate effective and culturally responsive police services, supporting self-sufficiency and self-governance for First Nations communities. Through a tripartite agreement,  between Takuhikan, Quebec, and Canada made pursuant to the FNPP, Takuhikan administers police services in the community of Mashteuiatsh.  Under the agreement, government funding for the policing services was split between Canada and Quebec and it was stipulated that Takuhikan was responsible for any budgetary deficits incurred.

For several years, Takuhikan made great efforts to receive adequate funding for its police force in order to provide services of the same quality as those offered to non-Indigenous populations. Takuhikan incurred deficits due to chronic underfunding by Quebec and Canada.

Originating Application and Issues on Appeal

In 2017, Takuhikan sought reimbursement for deficits. Takuhikan argued that Quebec and Canada breached their obligations to negotiate in good faith and act with honour, and to discharge their fiduciary duties to Takuhikan with regards to the funding of its police force. Takuhikan argued that Quebec and Canada arbitrarily set the amount of their contributions, although they knew that these contributions did not correspond to the actual cost of establishing and operating the Takuhikan police service The trial judge, however, dismissed the claim, emphasizing contract law principles and the strict terms of the agreement.

Decision on Appeal

In December 2022, the Quebec Court of Appeal (QCCA) unanimously concluded that Canada and Quebec had not fulfilled their legal obligations by underfunding the Indigenous police services in Mashteuiatsh. Key aspects of the decision in respect of the issues on appeal were:

1. Relevance of Exhibits: The appellant Takuhikan alleged that the trial judge erred by dismissing exhibits supporting the connection between police services and self-governance. The QCCA agreed and held that the honour of the Crown is at stake in the tripartite agreement and that it is an error to rely solely on the strict wording of the agreement to determine the Crown’s obligations. Materials concerning self-governance were relevant because of the constitutional obligations at play.

2. Sufficiency of Tripartite Agreements: The appellant Takuhikan alleged that the trial judge erred by relying solely on the agreement’s strict wording to decide on deficit reimbursement. The QCCA found fault with the trial judge’s reliance on contract terms and found that constitutional principles, particularly the Crown’s duty to act honourably, must be considered when interpreting contracts between the Crown and First Nations.

3. Honour of the Crown: The QCCA concluded that the honour of the Crown applied and that Quebec and Canada breached their duty by not funding the police force adequately, undermining the goal of self-governance. After the tripartite agreement was made, the only way Takuhikan could pursue its objective of self-governance and policing autonomy was by accepting inadequate funding and incurring deficits. The QCCA rejected Canada and Qubec’s arguments in defence of the funding arrangement and held that both levels of government acted in bad faith by “turning a deaf ear” to Takuhikan’s requests and complaints about the funding regime. The QCCA’s conclusion was consistent with the parallel proceedings at the Canadian Human Rights Tribunal, which are the subject of an application for judicial review by Canada.

Implications for First Nations

The decision in Takuhikan v Procureur général du Québec sets a precedent for redefining the obligations owed to First Nations under the FNPP, emphasizing the constitutional duty of the Crown to act honourably in supporting self-governance through adequately funded police services. The decision and principles arising in it may have the following broader implications for First Nations:

1. Contract Interpretation: When determining whether the Crown has met its obligations to a First Nation in a contractual agreement, the QCCA directs that the appropriate approach of Courts is to canvas the applicable constitutional principles and apply those principles to consideration of the agreement and its wording. As such, the Crown cannot rely on the strict terms of agreements, including express terms intended to limit liability (e.g., committing to provision of funds only as is permitted by budgetary constraints), to determine the scope of their obligations to a First Nation in a contractual relationship. There is no indication that this approach is limited to funding agreements.

2. Constitutional Obligations Prevail: The ruling expands the obligations of Quebec and Canada beyond the strict terms of the tripartite agreement, recognizing the constitutional duty to adequately fund Indigenous police services for effective self-governance.

3. Self-Governance and Funding: The ruling recognizes the link between Indigenous police services and Indigenous self-governance, creating an opportunity for First Nations to advocate for funding arrangements that align with the unique needs and customs of their communities.

The Attorney General of Quebec applied for and was granted leave to appeal to the Supreme Court of Canada. The Attorney General of Canada is not taking a position on the appeal. Appeal materials will be filed in early 2024 and it is anticipated that the case will be heard later that year.