Sturgeon Lake First Nation [Red Deer Holdings agricultural lease claim]

March 1998

The Sturgeon Lake First Nation's claim in this inquiry arose from a leasing arrangement with Red Deer Holdings Ltd. (RDH) in relation to some 1813 acres of the First Nation's reserve (IR101). During the early stages of the Indian Claims Commission's inquiry process, Canada agreed to accept the claim for negotiation, so the Commission was not required to complete its inquiry into the legal and historical basis of the claim. The Commission did issue a report containing a brief summary of the claim based on the First Nation's submission, however, and commented on Canada's "15-year rule" in relation to specific claims.

After the First Nation ceased its own farming operations in the late 1970s, it entered into a lease of reserve land in the spring of 1981 with a person who subsequently declared bankruptcy. When RDH paid up the arrears of $31,000 and offered to enter into a similar lease arrangement, the First Nation issued Band Council Resolutions on May 21 and June 9, 1982, requesting Indian Affairs to issue an agricultural permit to RDH under subsection 28(2)of the Indian Act for a lease of the reserve land for the period January 1, 1982, to December 31, 1984, subject to payment of $45,000 on November 1, 1982, and subsequent payments of $22,500 on April 1 and November 1 of each year.

Although Indian Affairs prepared a draft agricultural permit between RDH, as permitted, and the Department, on behalf of the Crown, as permittor, RDH sought an amendment allowing it to terminate the permit if it wished, and, ultimately, it never signed the document. Nevertheless, RDH commenced operations without a permit. When frost destroyed the crop and RDH's insurance would not cover the loss, a representative of RDH met with the Band Council to renegotiate the fall payment under the permit. However, the First Nation obtained legal advice that it should look to Indian Affairs for moneys under the permit, and that it was Indian Affairs' responsibility to deal with RDH to obtain those payments. Accordingly, Indian Affairs was advised that the First Nation considered the Department responsible for the failure to finalize the permit and for allowing RDH to farm the land, as well as harvest and remove crops from it, without taking appropriate steps to protect the First Nation's interest. The arrears owing to the First Nation as of November 1, 1982, were claimed to be $73,000. The First Nation further informed the Department that there was a pending Saskatchewan Crop Insurance payment to be made to the principal of RDH for losses incurred during the 1982 crop year.

The Department of Justice agreed to commence legal action to recover the overdue rent, but there were difficulties over who should be named in the suit. RDH did not hold any assets, and its principal was not a party to the failed agricultural permit. Ultimately, the litigation was abandoned because of concerns that substantial costs would be incurred with no real probability of success.

The First Nation looked to Indian Affairs to compensate it for the lease arrears plus other related expenses, but its repeated requests were rejected in October 1985, October 1986, March 1987, and March 1988. In 1994, the First Nation submitted a specific claim to the Minister of Indian Affairs alleging that the Crown breached its lawful obligations with respect to the administration of the First Nation's reserve land by failing to do a background check to determine what authority the principal had within RDH and what the financial position of the company was, failing to obtain a personal guarantee from the principal of RDH, and failing to have the agricultural permits signed by RDH.

Indian Affairs did not reject the claim outright. Instead, the Department's Specific Claims Branch responded that it was "not appropriate" to consider the grievance because the events giving rise to it were recent and "[t]he Specific Claims process is intended to address longstanding historical grievances."

In May 1996, the First Nation requested that the Indian Claims Commission conduct an inquiry into the claim. During a planning conference convened by the Commission on July 11, 1996, and in subsequent conference calls, the Department of Justice continually maintained that the Specific Claims Policy was intended to address only longstanding historical claims. The Department further contended that it could not provide an opinion on the merits of the claim to Indian Affairs because 15 years had not elapsed since the claim had arisen. However, since the 15 - year period was soon to expire, Canada invited the First Nation to resubmit the claim when that anniversary was reached. The First Nation agreed and resubmitted the claim in March 1997. Canada agreed to expedite its legal review of the claim, and the claim was accepted for negotiation in August 1997.

Although Canada accepted the claim for negotiation, making it unnecessary to complete the inquiry, the Commission felt compelled to comment on the "15-year rule." No such rule or policy is expressed in the Specific Claims Policy as set out in Outstanding Business. In the Commission's view, Outstanding Business was intended to address specific claims which are "based on lawful obligations" or "disclose an outstanding ‘lawful obligation,'" and which "relate to the administration of land and other Indian assets and the fulfilment of Indian treaties." There is no reference to time limits in Outstanding Business, and, if Canada had intended to impose such a 15-year limit, it could and should have done so in clear and express terms.

Moreover, the underlying rationale of the 15 - year rule is not supported by Outstanding Business, which was intended to address all outstanding claims"between Indians and government which for the sake of justice, equity and prosperity must be settled without further delay." The Commission concluded that an arbitrary waiting period before a claim can be reviewed under the Specific Claims Policy is counterproductive to the settlement process and risks the loss of first-hand knowledge, salient evidence, and important documents. A First Nation's only other option is to pursue litigation. This course of action would increase both time and costs, and would run counter to Outstanding Business, which was specifically designed to avoid litigation. The Commission recommended that the 15-year rule be withdrawn and that any First Nations whose claims have been refused for consideration on this basis be notified.

Response: The government settled this claim in October 1998. The government responded to the Commission's recommendation regarding the "15 year rule" in a letter dated June 16, 1998.

Download letter from the Minister of Indian Affairs and Northern Development

Click Here for the Report