Completed Inquiries – Reports Released

01/12/1997

Eel River Bar First Nation [Eel River Dam] - December 1997

December 1997

The ancestors of the Eel River Bar First Nation were parties to the 1779 Treaty of Peace and Friendship, in which the Crown promised that the Indians "shall remain in the Districts before mentioned Quiet and Free from any molestation of any of His Majesty's Troops or other his good Subjects in their Hunting and Fishing." A reserve was initially set aside for the First Nation in 1807, and, by 1962, the reserve comprised 434.67 acres. The Order in Council first setting apart the reserve provided that land at the mouth of the Eel River, "including the Eel Fishery," be reserved to the Indians. Because the land base was unsuited for agriculture, the First Nation came to rely on the clam harvest as the mainstay of its economy.

In 1962, the New Brunswick Water Authority (NBWA) sought to erect a dam at the mouth of the Eel River to secure a supply of fresh water to attract industry to the Town of Dalhousie. Indian Affairs recognized that the project could have an impact on the First Nation's clam flats and retained Dr J.C. Medcof of the Fisheries Research Board to study the problem. Although Dr Medcof was at first unable to provide a firm opinion on the effects of damming the river, Indian Affairs pursued the First Nation's position that an upstream site would be preferable to the NBWA's favoured location at the river's mouth. Eventually, in part because of the costs associated with the river mouth location, the upstream site was selected. Owing to time constraints in attracting Canadian Industries Limited to the area, the First Nation passed a Band Council Resolution (BCR) in 1963 authorizing the Town of Dalhousie to proceed with construction subject to compensation of $4000 for the land to be flooded, compensation on a volume basis for loss of clam and smelt production (not to exceed $50,000), and assistance in creating a trout fishing pool as a tourist attraction. The compensation for loss of production could be reduced by 5 per cent for every male Indian obtaining alternative employment providing remuneration of not less than $2000 before September 1, 1967.

Indian Affairs was uncertain whether the First Nation had a legally enforceable claim for loss of income from the fishery, and the potential losses were difficult to assess pending release of Dr Medcof 's survey. The dam was completed by November 1963 without an agreement on compensation or any formal authorization under the Indian Act. Negotiations continued until 1968, but the First Nation and the NBWA were unable to reach agreement on terms concerning employment and the value of the clam fishery. Whether due to systemic discrimination, high unemployment, or otherwise, the Town of Dalhousie did not prove successful in securing alternative employment opportunities for the Indians. As negotiations foundered, senior officials of Indian Affairs became involved. Since the idea of employment had proven unworkable, the First Nation pressed for full financial compensation. Dr Medcof 's final report, completed in late 1967, forecast "great and long-lasting" effects from the dam and recommended that the Town of Dalhousie share with the First Nation the considerable benefits to be derived from the project.

In 1968, the NBWA sought to increase the storage capacity of the reservoir, and the province assumed the town's position in the settlement discussions. During the negotiations, the First Nation passed a BCR instructing the Minister of Indian Affairs to issue a one-year permit to the province to permit work to be undertaken until a formal agreement could be negotiated. In March 1970, the Band Council passed another BCR accepting terms proposed by the NBWA, but Indian Affairs took steps to negotiate better terms to limit the NBWA's rights of access and to reserve the First Nation's right to claim compensation for future damages. Ultimately, following considerable bargaining, and despite Indian Affairs' ongoing concern that the First Nation did not have any special claim or treaty rights to the area, the final agreement of May 14, 1970, provided that, in exchange for the necessary lands, the NBWA would pay $15,000 for some 115 acres of land, $25,000 for damage and losses caused by the works, and an initial amount of $9591.12, plus $10,000 to $27,375 per year for 20 years, based on the quantity of water pumped. The agreement provided that the NBWA would acquire the headpond area by expropriation, and the areas required for a pipeline, pumphouse, and access road under a permit pursuant to section 28(2) of the Indian Act. It contained no employment provisions, however. In 1995, new pumping fees were negotiated at significantly higher rates than for the first 20 years.

The Indian Claims Commission (ICC) concluded that, while the First Nation had treaty fishing rights under the treaty of 1779, it was open to Canada, before the Constitution Act, 1982, to infringe upon those rights, provided it expressed a clear intention to do so. Canada did infringe upon those rights, but the issue is whether it had lawful authority, by statute or agreement with the First Nation, to do so. In accordance with the Supreme Court of Canada authority in Opetchesaht Indian Band v. Canada, the section 28(2) permit was properly granted, having regard for the length of its term, the ascertain ability of its termination, and the nature of the interest granted. As for the headpond area, the Governor in Council authorized this expropriation under section 35(3) of the Indian Act, meaning that it was not necessary for the NBWA to comply with the formal expropriation requirements of the provincial statute. Although the First Nation consented to the expropriation, this agreement did not alter the fact that the acquisition was essentially compulsory, and thus it could not be claimed that there can be no expropriation where the owner consents to the taking. Moreover, a surrender is not required where reserve lands are acquired by expropriation.

The consent or agreement of the First Nation as expressed in the 1963 BCR was void because no permit has been issued under section 28(2) of the Indian Act. There was a trespass on reserve land from 1963 to 1970, the extent of which was narrowed by the 1968 permit, since the permit did not authorize use of the headpond lands. However, no lawful obligation flowed from this trespass because the 1970 agreement compensated for losses and damages arising from the project.

Regard must be had to the twin principles of autonomy and protection in dealing with the disposition of Indian interests in reserve land. Although the Crown has a statutory and fiduciary duty to protect Indian bands from unlawful dispositions, the autonomy of the band to make decisions regarding its land and resources must be respected. Different levels of autonomy and protection apply, depending on the nature of the rights granted. Accordingly, the ICC concluded that Canada discharged its fiduciary obligations to the First Nation. Canada ensured that the First Nation was fully informed and received expert advice. Canada was also a strong advocate in obtaining significant commitments from the NBWA, notwithstanding its own concerns regarding the nature and extent of the First Nation's interest in the fishery. Canada's representatives had no conflicting interests or inappropriate motives that would have "tainted" the dealings. Since the First Nation did not cede its decision-making power to Canada, its decision should be honoured and respected. Moreover, the 1970 agreement was not foolish, improvident, or exploitative such that Canada should have withheld its consent. In the result, the Commission recommended that the First Nation's claim not be accepted for negotiation under the Specific Claims Policy.

Response: The First Nation has requested that the Commission reconsider its findings. After revisiting the community and conducting additional research, the Commission confirmed that the government has no outstanding lawful obligation in relation to this claim.

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