[2000] 1 F.C. 325
A-389-96 (T-639-92)
The Matsqui Indian Band and Matsqui Indian Band Council (Appellants) (Respondents)
v.
Canadian Pacific Limited and Unitel Communications Inc. (Respondents) (Applicants)
and
The Little Shuswap Indian Band, The Little Shuswap Indian Band Council, Chief Clarence T. (Manny) Jules and The Indian Taxation Advisory Board (Interveners)
A-386-96 (T-2790-93)
Seabird Island Indian Band and Seabird Island Indian Band Council (Appellants) (Respondents)
v.
Canadian Pacific Limited (Respondent) (Applicant)
and
The Little Shuswap Indian Band, The Little Shuswap Indian Band Council, Chief Clarence T. (Manny) Jules and The Indian Taxation Advisory Board (Interveners)
A-403-96 (T-2780-93)
Boothroyd Indian Band and Boothroyd Indian Band Council (Appellants) (Respondents)
v.
Canadian Pacific Limited (Respondent) (Applicant)
and
The Little Shuswap Indian Band, The Little Shuswap Indian Band Council, Chief Clarence T. (Manny) Jules and The Indian Taxation Advisory Board (Interveners)
A-479-96 (T-2781-93)
Cook’s Ferry Indian Band and Cook’s Ferry Indian Band Council (Appellants) (Respondents)
v.
Canadian Pacific Limited (Respondent) (Applicant)
and
The Little Shuswap Indian Band, The Little Shuswap Indian Band Council, Chief Clarence T. (Manny) Jules and The Indian Taxation Advisory Board (Interveners)
A-480-96 (T-1316-92)
Skuppah Indian Band and Skuppah Indian Band Council (Appellants) (Respondents)
v.
Canadian Pacific Limited (Respondent) (Applicant)
and
The Little Shuswap Indian Band, The Little Shuswap Indian Band Council, Chief Clarence T. (Manny) Jules and The Indian Taxation Advisory Board (Interveners)
Indexed as: Canadian Pacific Ltd. v. Matsqui Indian Band (C.A.)
Court of Appeal, Marceau, Desjardins and Robertson JJ.A.—Vancouver, January 18, 19, 20, 21; Ottawa, June 25, 1999.
Native peoples — Taxation — Notices of assessment issued pursuant to taxation by-laws under Indian Act, s. 83 against Canadian Pacific with respect to rights-of-way traversing reserves in British Columbia invalid — Whether rights-of-way “lands within reserve” over which bands had jurisdiction — Whether by-laws discriminatory as only property interests of non-Indians situate on reserves taxed.
Railways — Notices of assessment issued pursuant to taxation by-laws under Indian Act, s. 83 against Canadian Pacific (CP) with respect to rights-of-way traversing reserves in British Columbia invalid — Nature of CP’s title to lands comprised in rights-of-way traversing various reserves — Interplay between Indian Act, Act respecting Canadian Pacific Railway, Railway Act — Whether Crown had requisite authority to convey fee simple title to CP — Whether CP’s rights-of-way traversing reserves “lands within reserve” over which bands had jurisdiction — Whether CP discriminated against as only property interests of non-Indians situate on reserves taxed under by by-laws.
Administrative law — Judicial review — Taxation — Whether taxation by-laws adopted by Indian bands exempting Indians’ interests in land from taxation discriminatory — Whether band councils exempt from application of principles of administrative law governing subordinate statutory bodies.
In this case, each appellant band council issued notices of assessment against Canadian Pacific Ltd. (CP) pursuant to new taxation by-laws made under section 83 of the Indian Act. CP attacked the notices of assessment, arguing that they were invalid on the basis that the rights-of-way traversing the reserves were held by it in fee simple determinable and therefore were not lands within the reserves over which the bands had jurisdiction, and that the by-laws were invalid because they were discriminatory in that only the property interests of non-Indians situate in the reserves were made subject to taxation. The Motions Judge agreed on both counts. These were appeals from that decision.
Held (Robertson J.A. dissenting), the appeals should be dismissed.
Per Marceau J.A.: If the lands are owned by CP in fee simple, they are no longer vested in Her Majesty and set apart for the use and benefit of the Indians. If not, they cannot be considered as having been taken out of the reserves and would be taxable. The issue of title should be limited to a choice between fee simple and easement. In fact, the sole real issue was whether the Crown had authority to convey, as it had openly done by the individual letter patents and grants, a fee simple title.
One should bear in mind the very special circumstances in which An Act respecting the Canadian Pacific Railway (CPR Act) came into being: the commitment undertaken by the federal government in the Act of Union bringing the colony of British Columbia into Canada to construct a railway that would connect the seaboard of the new province with the railway system of the rest of the country; the failure of the government to satisfy its obligation within the time frame of ten years that had been contemplated; the perceived necessity to do all that was required to complete what had been commenced; finally, the direct involvement of the good faith and the honour of the government in finding, at last, a viable solution. That a piece of legislation passed under such circumstances was meant to produce extraordinary effects should surprise no one. However, what was relevant was not the rationale behind each conveyance but rather its legality in so far as it disclosed the granting of a fee simple. This involved not an analysis of the historical record but rather an analysis of the relevant provisions of the CPR Act as the authority under which each individual conveying document was issued. Everyone involved in the issuance of the letters patent took the position that the lands on which the railway completed by the government was constructed were to be conveyed separately from the railway itself. It was perfectly natural that, given an obligation to convey both the railway and the lands, the contract would treat the lands and railway separately.
Section 5 of the CPR Act and article 7 of the contract, which the Act was adopted to give effect to, were not meant to cover the lands. The other provisions of the contract lead to the conclusion that CP sought to own the land. One can see no reason why CP would have sought to own the land upon which its tracks were to run in the eastern (from Lake Nipissing to Selkirk) and central (from Selkirk to Kamloops) sections of the track, but have no corresponding interest in the ownership of such lands with respect to the western section. Having a desire to secure ownership of such lands throughout the length of its operation, it is evident that CP would seek to secure an absolute interest in lands so conveyed by ensuring the extinguishment of any Aboriginal interest in those lands, irrespective of geographic location. The CPR Act was meant to confer on the government the power and the obligation to convey all of the lands required for the railway with respect to any of its three segments in fee simple, free of any Indian interest. There is nothing in the CPR Act nor in the various conveying documents issued on its authority that would suggest the granting of a title other than fee simple. So the lands in the railway right-of-way traversing the reserves were not lands within the reserves upon which the appellants would have a power of taxation.
Robertson J.A.’s opinion, that the Motions Judge erred in concluding that the by-laws were invalid for being discriminatory, was agreed with. One could not understand the rationale behind the distinction made by the Motions Judge between the possibilities of different treatments that he considers impliedly authorized and those he rejects, since, in all cases, it is the taxpayers who are targeted. Since the earliest Indian Act provisions, Indian people have been assured of a quite significant privilege of tax exemption with respect to the use and occupation of their reserve lands, a privilege expressed in general terms and accorded to each individual Indian. It appears inconceivable that Parliament could have made the exercise by the bands of their new tax-levying power subject to an implicit forced renunciation by all their members of that basic privilege, without taking care to spell it out in unequivocal terms. When one speaks of the elements of the special status of a group of individuals within the community as determined by Parliament, one can speak of inequality, of course, but not necessarily of discrimination. It appears quite inappropriate to apply to Indian bands’ new by-law powers the principles of interpretation developed in municipal law. The devolved taxation powers of municipalities exist only to further governmental objectives of efficiency in operation and administration. The recent granting of taxation powers to Indian bands has a much broader and humane objective, which can only be seen in the context of furthering the ability of natives to govern themselves and thus, to a certain extent, invokes rights and responsibilities that predate all Indian Acts. It would be wrong to subject both sets of rules to the same standard of inflexibility, rigidity and limitation.
Per Desjardins J.A. (concurring in the result): Robertson J.A. is agreed with in finding that the lands comprising the rights-of-way of CP are “in the reserve” within the meaning of section 83 of the Indian Act. However, the appeals should be dismissed on the ground that the taxation by-laws adopted by the appellants which exempt from taxation Indians’ interest in land are discriminatory. They run counter to fundamental principles of administrative law.
The purpose of the section 87—subject to section 83, exempting Indian property from taxation—is to guard against the possibility that one branch of government, through the imposition of taxes, could erode the full measure of the benefits given by that branch of government entrusted with the supervision of Indian affairs: Mitchell v. Peguis Indian Band, [1990] 2 S.C.R. 85. However, the exemption in section 87 is restricted to taxation by non-Indian governments. The purpose of section 83 is intended to facilitate the development of Aboriginal self-government by allowing bands to exercise the inherently governmental power of taxation on their reserves: Canadian Pacific Ltd. v. Matsqui Indian Band, [1995] 1 S.C.R. 3. Paragraph 83(1)(a) of the Act, when read in conjunction with section 87, is to be interpreted as allowing the band councils, with the approval of the Minister, to run counter to section 87 and to tax for local purposes land or interests in land of both Indians and non-Indians situated in the reserve, including the rights to occupy, possess or use land in the reserve. There are no words in paragraph 83(1)(a) of the Act which guarantee to Indians that they will not be taxed by their band councils. What paragraph 83(1)(a) does is to empower band councils to tax all interests in the reserve, whether they are Indian or non-Indian interests. It does not exempt Indian interests from the taxing power of band councils, as section 87 does with regard to Acts of Parliament and the provincial legislatures.
The rule that the power to make by-laws does not include that of enacting discriminatory provisions unless the enabling legislation provides the contrary has been observed from time immemorial in British and Canadian public law: Montréal (City of) v. Arcade Amusements Inc. et al., [1985] 1 S.C.R. 368. Although the band councils are a sui generis type of subordinate statutory bodies, they cannot escape the principles of administrative law which govern subordinate statutory bodies. The by-laws are invalid in toto since it cannot be assumed that they would have been adopted had it been known that certain portions of them (exempting band members from taxation) were invalid.
Per Robertson J.A. (dissenting): The appeals should be allowed. CP could not have validly acquired fee simple title to the rights-of-way. At best, it acquired a statutory easement or licence. Consequently, the lands in question are “in the reserve”, as that term is defined by the Indian Act and, therefore, the notices of assessment are valid. Furthermore, the by-laws are not ultra vires on the ground of unauthorized discrimination and, therefore, they are valid.
Lands comprising the right-of-ways
The determination of the nature of the title conveyed through the intersection of the Railway Act, the Indian Act and the CPR Act requires the examination of such fundamental questions as: (1) the definition of reserve lands under the Indian Act; (2) the intention of Parliament in conveying railway lands to CP; and, most significantly, (3) whether the Crown had the requisite authority to convey fee simple title to CP.
(1) The definition of “reserve” and “designated lands” were examined. The conveyancing documents received by CP and presented to the Court purport to convey fee simple title to each right-of-way, not a determinable fee. It remains to be decided whether the Crown had the authority to convey title in fee simple, notwithstanding the provisions of the Indian Act and the Railway Act.
It is clear that in order to be exempt from the application of subsection 7(3) of The Consolidated Railway Act, 1879, which provides that no railway company can take or use lands vested in Her Majesty without the consent of the Governor in Council and that land so acquired cannot be alienated, two requirements must be met: (1) a special Act must be enacted; and (2) there must be an express provision in that legislation identifying which provisions of the Railway Act are to be overridden. In the absence of these preconditions, the Crown cannot convey, and the railway companies cannot acquire, fee simple title to Crown lands, including reserve lands, since the alienation of such lands is prohibited under the Railway Act. At best, CP obtained statutory easements to the rights-of-way or licences to use or occupy reserve lands required for railway purposes. When acquiring Crown lands, CP does so subject to the restriction on alienation imposed by subsection 7(3). No article of the contract attached as a schedule to the CPR Act displaced or overrode the restraint on alienation imposed on Crown lands acquired by railway companies. Accordingly, CP could not legally obtain fee simple title to the rights-of-way, the rights-of-way are in the reserve and the notices of assessment are valid. The provisions of the CPR Act and the contract cannot be interpreted so as to extinguish Indian rights to reserve lands in the absence of clear and express language to the contrary. It was noted that “it is appropriate to interpret in a broad manner provisions that are aimed at maintaining Indian rights, and to interpret narrowly provisions aimed at limiting or abrogating them”: Mitchell v. Peguis Indian Band. In this case, it was neither reasonable nor necessary to hold that the term “absolute property”, in section 5 of the CPR Act and article 7 of the contract, was intended to override the provisions of the Indian Act so as to effectively extinguish Indian title to reserve lands. CP has never needed any more than a statutory easement to effectively operate its railway lines across reserve lands and a statutory licence with respect to adjacent lands used in railway operations. In the absence of express extinguishment, CP cannot legitimately claim more than is necessary to effectively operate its railway. The contractual obligation imposed on the Crown to convey to CP absolute title to the railway, when properly construed, does not derogate from these two propositions. Furthermore, the obligation to extinguish Indian title was restricted to lands located within the central and eastern segments of the railway. It did not extend to the western segment.
Discrimination
It is common ground that there is no express provision in the Indian Act permitting the differential treatment of band members on reserve lands. The central question in these appeals is whether a band council must tax both Indians and non-Indians when enacting a taxation by-law. Ministerial approval of taxation by-laws is of no significance for the reason that the Minister is subject to the same constraints as the appellant Indian bands. There are only two issues to be addressed with respect to the discrimination issue. The first is whether Parliament intended to authorize the type of discrimination alleged by CP. The only objective evidence of Parliamentary intent is found in a pamphlet distributed by the Minister to the effect that reserve Indians would remain exempt from taxation. The second is whether the authority to discriminate arises by necessary implication. Any time a court of law is asked to read an implied term into a statute, that court is being asked to consider competing interests, and to determine which should prevail. In this case, the balance favours the appellants’ interests. To the extent that the tax exemption for the Indian interest in reserve lands flows from notions of Aboriginal sovereignty, such exemptions should be protected in the absence of statutory directions to the contrary. Furthermore, it is highly significant that the Indian Act, by its very nature, draws distinctions between Indians and non-Indians in Canada. Since by-laws enacted by an Indian band pursuant to section 83 of the Indian Act constitute subordinate legislation, it is reasonable to imply that the constitutional authority to distinguish between Indians and non-Indians for the purpose of taxation was delegated to the Indian band councils. However, any attempt by a band council to impose the entire burden of taxation solely on non-Indians would not survive the light of day. There are appeal processes in place which CP has access to, in addition to the courts. As well, it is not band authorities that carry out the assessments, it is the BC Assessment Authority which is under the direction of the provincial government.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
An Act for the protection of the Indians in Upper Canada from imposition, and the property occupied or enjoyed by them from trespass and injury, S.C. 1850, c. 74, s. 4.
An Act relating to the Island Railway, the Graving Dock, and Railway Lands of the Province, S.B.C. 1883, c. 14.
An Act respecting the Canadian Pacific Railway, S.C. 1881, c. 1, ss. Preamble, 5, Schedule, ss. 7, 9, 10, 11, 12, 14, 22, Sch. A, ss. 17, 18.
An Act to amend “The Indian Act”, S.C. 1887, c. 33, s. 5.
An Act to amend the Indian Act, S.C. 1911, c. 14, s. 1.
An Act to amend the Indian Act (designated lands), R.S.C., 1985 (4th Supp.), c. 17, s. 1.
An Act to grant public lands on the Mainland to the Dominion in aid of the Canadian Pacific Railway, 1880, S.B.C. 1880, c. 11.
B.C. Order in Council 1036/1938.
British Columbia Terms of Union, R.S.C., 1985, Appendix II, No. 10, s. 11.
Canada Transportation Act, S.C. 1996, c. 10, ss. 96, 185.
Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, No. 44], ss. 15, 25.
Canadian Pacific Railway Act, 1874 (The), S.C. 1874, c. 14.
Consolidated Railway Act, 1879 (The), S.C. 1879, c. 9, ss. 2(2),3, 7(3),(18).
Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.) (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1) [R.S.C., 1985, Appendix II, No. 5], s. 91(24).
Indian Act, R.S.C. 1906, c. 81, ss. 46 (as am. by S.C. 1911, c. 14, s. 1), 48.
Indian Act, R.S.C. 1927, c. 98, ss. 48, 50.
Indian Act, R.S.C., 1985, c. I-5, ss. 2(1) “designated lands” (as am. by R.S.C., 1985 (4th Supp.), c. 17, s. 1), “reserve” (as am. idem), 23, 28, 35, 37 (as am. idem, s. 2), 83 (as am. idem, s. 10), 87.
Indian Act (The), R.S.C. 1886, c. 43, ss. 35, 38.
Indian Act (The), S.C. 1951, c. 29, ss. 35, 37.
Indian Act, 1880 (The), S.C. 1880, c. 28, ss. 31, 36.
Indian Self Government Enabling Act, S.B.C. 1990, c. 52, s. 11.
Order in Council P.C. 1891-1653.
Order in Council P.C. 1930-1116.
Railway Act, R.S.C. 1906, c. 37, ss. 4, 175.
Railway Act, R.S.C. 1927, c. 170, s. 189.
Railway Act, R.S.C. 1952, c. 234, ss. 192, 195.
Railway Act, R.S.C. 1970, c. R-2, ss. 130, 133.
Railway Act, R.S.C., 1985, c. R-3, ss. 134, 137.
Railway Act (The), R.S.C. 1886, c. 109, s. 3.
Railway Act (The), S.C. 1888, c. 29, ss. 5, 6, 99, 101, 103.
Railway Act, 1903 (The), S.C. 1903, c. 58, ss. 5, 136.
Railway Act, 1919, The, S.C. 1919, c. 68, s. 192.
Royal Proclamation, 1763 (The), R.S.C., 1985, Appendix II, No. 1.
Rupert’s Land and North-Western Territory Order, R.S.C., 1985, Appendix II, No. 9.
Treaty No. 3 (1873).
Treaty No. 4 (1875).
Treaty No. 5 (1875).
Treaty No. 6 (1876).
Treaty No. 7 (1877).
CASES JUDICIALLY CONSIDERED
CONSIDERED:
Vancouver, City of v. Canadian Pacific Ry. Co. (1894), 23 S.C.R. 1; Canadian Pacific Ry. Co. v. James Bay Ry. Co. (1905), 36 S.C.R. 42; Mitchell v. Peguis Indian Band, [1990] 2 S.C.R. 85; (1990), 71 D.L.R. (4th) 193; [1990] 5 W.W.R. 97; 67 Man. R. (2d) 81; [1990] 3 C.N.L.R. 46; 110 N.R. 241; 3 T.C.T. 5219; Williams v. Canada, [1992] 1 S.C.R. 877; (1992), 90 D.L.R. (4th) 129; 41 C.C.E.L. 1; [1992] 3 C.N.L.R. 181; [1992] 1 C.T.C. 225; 92 DTC 6320; 136 N.R. 161; Canadian Pacific Ltd. v. Matsqui Indian Band, [1995] 1 S.C.R. 3; (1995), 122 D.L.R. (4th) 129; 26 Admin. L.R. (2d) 1; [1995] 2 C.N.L.R. 92; 177 N.R. 325; St. Mary’s Indian Band v. Cranbrook (City), [1997] 2 S.C.R. 657; (1997), 147 D.L.R. (4th) 385; [1997] 8 W.W.R. 332; 35 B.C.L.R. (3d) 218; 92 B.C.A.C. 161; [1997] 3 C.N.L.R. 282; 40 M.P.L.R. (2d) 131; 213 N.R. 290; 150 W.A.C. 161; Montréal (City of) v. Arcade Amusements Inc. et al., [1985] 1 S.C.R. 368; (1985), 14 D.L.R. (4th) 161; 29 M.P.L.R. 220; 58 N.R. 339; R. v. Sharma, [1993] 1 S.C.R. 650; (1993), 100 D.L.R. (4th) 167; 10 Admin. L.R. (2d) 196; 79 C.C.C. (3d) 142; 19 C.R. (4th) 329; 14 M.P.L.R. (2d) 35; 149 N.R. 161; 61 O.A.C. 161; Whitebear Band Council and Carpenters Provincial Council of Saskatchewan et al., Re (1982), 135 D.L.R. (3d) 128; [1982] 3 W.W.R. 554; 15 Sask. R. 37 (Sask. C.A.); Re Estabrooks Pontiac Buick Ltd. (1982), 44 N.B.R. (2d) 201; 144 D.L.R. (3d) 21; 116 A.P.R. 201; 7 C.R.R. 46 (C.A.).
REFERRED TO:
Canadian Pacific Ltd. v. Matsqui Indian Band (1998), 162 D.L.R. (4th) 649; [1999] 1 C.N.L.R. 42; 228 N.R. 378 (F.C.A.); leave to appeal to S.C.C. refused [1999] 1 S.C.R. x; Kruger v. The Queen, [1986] 1 F.C. 3 (1985), 17 D.L.R. (4th) 591; [1985] 3 C.N.L.R. 15; 32 L.C.R. 65; 58 N.R. 241 (C.A.); British Columbia (Assessor of Area #25—Northwest-Prince Rupert) v. N & V Johnson Services Ltd. (1990), 73 D.L.R. (4th) 170; [1991] 1 W.W.R. 527; 49 B.C.L.R. (2d) 173; [1991] 1 C.N.L.R. 90; 1 M.P.L.R. (2d) 170 (C.A.); Westbank Property Management Ltd. v. Assessor of Area #19— Kelowna, [1993] 1 C.N.L.R. 176 (B.C.S.C.); Re Kinookimaw Beach Association and The Queen in right of Saskatchewan (1979), 102 D.L.R. (3d) 333; [1979] 6 W.W.R. 84 (Sask. C.A.); Re Stony Plain Indian Reserve No. 135 Development (1981), 35 A.R. 412; 130 D.L.R. (3d) 636; [1982] 1 W.W.R. 302; [1982] 1 C.N.L.R. 133 (Alta. C.A.); Forget v. Quebec (Attorney General), [1988] 2 S.C.R. 90; (1988), 52 D.L.R. (4th) 432; 32 Admin. L.R. 211; 10 C.H.R.R. D/5454; 87 N.R. 37; 17 Q.A.C. 241; Shell Canada Products Ltd. v. Vancouver (City), [1994] 1 S.C.R. 231; (1994), 110 D.L.R. (4th) 1; [1994] 3 W.W.R. 609; 88 B.C.L.R. (2d) 145; 20 Admin. L.R. (2d) 202; 41 B.C.A.C. 81; 20 M.P.L.R. (2d) 1; 163 N.R. 81; 66 W.A.C. 81; R. v. Sioui, [1990] 1 S.C.R. 1025; (1990), 70 D.L.R. (4th) 427; 56 C.C.C. (3d) 225; [1990] 3 C.N.L.R. 127; 109 N.R. 22; 30 Q.A.C. 287; Cook’s Ferry Band (Members of) v. Cook’s Ferry Band, [1990] F.C.J. No. 546 (C.A.) (QL); Re Stacey and Montour and The Queen (1981), 63 C.C.C. (2d) 61; [1982] 3 C.N.L.R. 158 (Que. C.A.); Thompson v. Fraser Companies Ltd., [1930] S.C.R. 109; (1929), 3 D.L.R. 778; The King v. Bonhomme (1917), 16 Ex. C.R. 437; 38 D.L.R. 647; affd (1918), 59 S.C.R. 679; 49 D.L.R. 690; B.C. (A.G.) v. Mount Currie Indian Band (1991), 54 B.C.L.R. (2d) 156; 4 C.N.L.R. 3 (C.A.); Opetchesaht Indian Band v. Canada, [1997] 2 S.C.R. 119; (1997), 147 D.L.R. (4th) 1; [1997] 7 W.W.R. 253; 90 B.C.A.C. 1; [1998]1 C.N.L.R. 134; 211 N.R. 241; 9 R.P.R. (3d) 115; 147 W.A.C. 1; Dugdale v. Dugdale (1888), 38 Ch. D. 176; In re Macleay (1875) L.R. 20 Eq. 186; Reese et al. v. The Queen, [1957] S.C.R. 794; (1957), 10 D.L.R. (2d) 479; Hartley v. Matson (1902), 32 S.C.R. 644; 2 M.C.C. 23; St. Ann’s Fishing Club v. The King, [1950] S.C.R. 211; [1950] 2 D.L.R. 225; Osoyoos Indian Band v. Oliver (Town) (1997), 145 D.L.R. (4th) 552; [1998] 2 C.N.L.R. 66 (B.C.S.C.); Gitanmaax Indian Band v. British Columbia Hydro and Power Authority (1991), 84 D.L.R. (4th) 562; [1992] 4 C.N.L.R. 28 (B.C.S.C.); St. Catherine’s Milling and Lumber Company v. Reg. (1888), 14 App. Cas. 46 (P.C.); C.P.R. v. A.G. for Saskatchewan, [1951] S.C.R. 190; [1951] 1 D.L.R. 721; (1950), 67 C.R.T.C. 203; [1951] C.T.C. 26; Halley, James J. v. Minister of National Revenue, [1963] Ex. C.R. 372; [1963] C.T.C. 108; (1963), 63 DTC 1090; Guerin et al. v. The Queen et al., [1984] 2 S.C.R. 335; (1984), 13 D.L.R. (4th) 321; [1984] 6 W.W.R. 481; 59 B.C.L.R. 301; [1985] 1 C.N.L.R. 120; 20 E.T.R. 6; 55 N.R. 161; 36 R.P.R. 1; Nowegijick v. The Queen, [1983] 1 S.C.R. 29; (1983), 144 D.L.R. (3d) 193; [1983] 2 C.N.L.R. 89; [1983] CTC 20; 83 DTC 5041; 46 N.R. 41; Canadian Pacific Ltd. v. Paul, [1988] 2 S.C.R. 654; (1988), 91 N.B.R. (2d) 43; 53 D.L.R. (4th) 487; 232 A.P.R. 43; [1989] 1 C.N.L.R. 47; 89 N.R. 325; 1 R.P.R. (2d) 105; Calder et al. v. Attorney-General of British Columbia, [1973] S.C.R. 313; (1973), 34 D.L.R. (3d) 145; [1973] 4 W.W.R. 1; Delgamuukw v. British Columbia (1991), 79 D.L.R. (4th) 185; [1991] 33 W.W.R. 97 (B.C.S.C.); varied (1993), 104 D.L.R. (4th) 470; [1993] 5 W.W.R. 97; 30 B.C.A.C. 1; [1993] 5 C.N.L.R. 1; 49 W.A.C. 1 (B.C.C.A.); revd in part [1997] 3 S.C.R. 1010; (1997), 153 D.L.R. (4th) 193; 99 B.C.A.C. 161; 220 N.R. 161; 162 W.A.C. 161; Four B Manufacturing Ltd. v. United Garment Workers of America et al., [1980] 1 S.C.R. 1031; (1979), 102 D.L.R. (3d) 385; 80 CLLC 14,006; [1979] 4 C.N.L.R. 21; 30 N.R. 421; Western Industrial Contractors Ltd. v. Sarcee Development Ltd. (1979), 15 A.R. 309; 98 D.L.R. (3d) 424; [1979] 3 W.W.R. 631 (C.A.); Sabattis v. Oromocto Indian Band (1986), 76 N.B.R. (2d) 227; 32 D.L.R. (4th) 680; 21 Admin. L.R. 294; 192 A.P.R. 227; [1987] 3 C.N.L.R. 99; 14 C.P.C. (2d) 46 (C.A.); Chadee v. Norway House First Nation (1996), 113 Man. R. (2d) 110; 139 D.L.R. (4th) 589; [1996] 10 W.W.R. 335; 43 Admin. L.R. (2d) 92; 23 C.C.E.L. (2d) 1; [1997] 2 C.N.L.R. 48; 131 W.A.C. 110 (C.A.); Deer v. Mohawk Council of Kahnawake, [1991] 2 F.C. 18 (1990), 41 F.T.R. 306 (T.D.); Batchewana Indian Band (Non-resident members) v. Batchewana Indian Band, [1994] 1 F.C. 394 (1993), 107 D.L.R. (4th) 582; [1994] 1 C.N.L.R. 71; 18 C.R.R. (2d) 354; 67 F.T.R. 81 (T.D.); Chippewas of Nawash First Nation v. Canada (Minister of Indian and Northern Affairs) (1996), 41 Admin. L.R. (2d) 232; [1997] 1 C.N.L.R. 1; 116 F.T.R. 37 (F.C.T.D.); Re B.C. Motor Vehicle Act, [1985] 2 S.C.R. 486; (1985), 24 D.L.R. (4th) 536; [1986] 1 W.W.R. 481; 69 B.C.L.R. 145; 23 C.C.C. (3d) 289; 48 C.R. (3d) 289; 18 C.R.R. 30; 36 M.V.R. 240; 63 N.R. 266; Harel v. Dep. M. Rev. of Quebec, [1978] 1 S.C.R. 851; (1977), 80 D.L.R. (3d) 556; [1977] CTC 441; 77 DTC 5438; 18 N.R. 91; McClanahan v. Arizona State Tax Comm’n, 411 U.S. 164 (1973); Bryan v. Itasca County, 426 U.S. 373 (1976); Re Leonard and The Queen in right of British Columbia (1984), 11 D.L.R. (4th) 226; [1984] 4 W.W.R. 37; 52 B.C.L.R. 389; [1984] 4 C.N.L.R. 21 (B.C.C.A.).
AUTHORS CITED
Bartlett, Richard H. Indians and Taxation in Canada, 3rd ed. Saskatoon: Native Law Centre, 1992.
Burn, E. H. Cheshire and Burn’s Modern Law of Real Property, 15th ed. London: Butterworths, 1994.
Canada. Royal Commission on Aboriginal Peoples. Report of the Royal Commission on Aboriginal Peoples, Vol. 2 “Restructuring the Relationship”. Ottawa: Minister of Supply and Services Canada, 1996.
Côté, Pierre-André. The Interpretation of Legislation in Canada, 2nd ed. Cowansville (Qué.): Éditions Yvon Blais Inc., 1991.
Davies, Virginia L. “The Use of Inter Vivos Trusts to Preserve Treaty Entitlements” in Report of Proceedings of the Forty-Fifth Tax Conference, Toronto: Canadian Tax Foundation, 1993.
Dempsey, Hugh A. Treaty Research Report: Treaty Seven. Ottawa: Treaties and Historical Research Centre, 1987.
Hogg, Peter W. Constitutional Law of Canada, Fourth Student Edition. Toronto: Carswell, 1996.
Isaac, Thomas F. Aboriginal Law: Cases, Materials and Commentary, 2nd ed. Saskatoon: Purich Publications, 1999.
La Forest, Gerard V. Natural Resources and Public Property under the Canadian Constitution. Toronto: University of Toronto Press, 1969.
Megarry, Sir Robert and M. P. Thompson, eds. Megarry’s Manual of the Law of Real Property, 7th ed. London: Sweet & Maxwell, 1993.
Pigeon, Louis-Philippe. Rédaction et interprétation des lois. Québec: Éditeur officiel, 1978.
Smith, Donald Myles. Title to Indian Reserves in British Columbia. Vancouver, Faculty of Law, University of British Columbia, 1988.
Tennant, Paul. Aboriginal Peoples and Politics: The Indian Land Question in British Columbia, 1849-1989. Vancouver: University of British Columbia Press, 1990.
APPEAL from a Trial Division decision (Canadian Pacific Ltd. v. Matsqui Indian Band, [1996] 3 F.C. 373 134 D.L.R. (4th) 555; [1997] 2 C.N.L.R. 16; 11 F.T.R. 161 (T.D.)) setting aside the assessment notices taxing the property of the respondents. Appeal dismissed.
A-480-96
A-386-96
A-479-96
APPEARANCES:
Gary S. Snarch and Fiona C. M. Anderson for appellant.
J. Edward Gouge, Q.C. for respondent.
Arthur M. Grant for intervener, the Little Shuswap Indian Band.
Leslie J. Pinder and Clarine Ostrove for interveners Chief Clarence T. Jules and the Indian Taxation Advisory Board.
SOLICITORS OF RECORD:
Snarch & Allen, Vancouver, for appellant.
Lawson Lundell Lawson & McIntosh, Vancouver, for respondent.
Grant, Kovacs, Norell, Vancouver, for intervener, the Little Shuswap Indian Band.
Mandell Pinder, Vancouver, for interveners, Chief Clarence T. Jules and the Indian Taxation Advisory Board.
A-403-96
APPEARANCES:
Leslie J. Pinder and Clarine Ostrove for appellant and interveners, Chief Clarence T. Jules and Indian Taxation Advisory Board. .
J. Edward Gouge, Q.C. for respondent.
Arthur M. Grant for intervener, the Little Shuswap Indian Band.
SOLICITORS OF RECORD:
Mandell Pinder, Vancouver, for appellant and interveners, Chief Clarence T. Jules and the Indian Taxation Advisory Board.
Lawson Lundell Lawson & McIntosh, Vancouver, for respondent.
Grant, Kovacs, Norell, Vancouver, for intervener, the Little Shuswap Indian Band.
A-389-96
APPEARANCES:
Arthur Pape for appellant.
J. Edward Gouge, Q.C. and W. A. Scott Macfarlane for respondent.
Arthur M. Grant for intervener, the Little Shuswap Indian Band.
Leslie J. Pinder and Clarine Ostrove for interveners Chief Clarence T. Jules and the Indian Taxation Advisory Board.
SOLICITORS OF RECORD:
Pape & Salter, Vancouver, for appellant.
Lawson Lundell Lawson & McIntosh, Vancouver, for respondent.
Grant, Kovacs, Norell, Vancouver, for intervener, the Little Shuswap Indian Band.
Mandell Pinder, Vancouver, for interveners, Chief Clarence T. Jules and the Indian Taxation Advisory Board.
The following are the reasons for judgment rendered in English by
[1] Marceau J.A.: I have had the advantage of reading the reasons for judgment prepared by my brother, Robertson J.A., for disposition of these five related appeals brought against a single decision of the Trial Division [[1996] 3 F.C. 373. By judicial review applications, Canadian Pacific Limited (CP or the respondent), joined by Unitel Communications Inc. in one of the files, attacked the notices of assessment that each appellant band council had issued against it (or them in one case) pursuant to new taxation by-laws made under section 83 of the Indian Act.[1] Two issues were raised in the litigation and were disposed of by the impugned decision. On the first and main issue, my brother is of the view that the learned Motions Judge erred in finding that the notices of assessment were invalid on the basis that the rights-of-way traversing the reserves were held by CP in fee simple determinable and therefore were not lands within the reserves on which the bands had jurisdiction. On the second alternative issue, my brother again takes the view that the learned Motions Judge erred in concluding that the by-laws were invalid because they were discriminatory in that only the property interests of non-Indians situate in the reserves were made subject to taxation. While I share my brother’s position on the second issue, I must respectfully express my disagreement on the main one. The two issues being completely distinct, they can only be addressed separately.
I
The Title Issue: Fee Simple
Title or Mere Easement
[2] The first issue requires essentially a determination of the nature of CP’s title to the lands comprised in its rights-of-way traversing the various reserves. If those lands are owned by CP in fee simple, they are no longer lands vested in Her Majesty and set apart for the use and benefit of the Indians. They are thus not part of the reserves and therefore not subject to the bands’ tax-levying powers. But if they are not so owned by CP, they cannot be considered as having been taken out of the reserves and would be taxable. In fact, an argument was made that it might not be necessarily so, since a lesser title than fee simple absolute could possibly leave the Crown with a vested interest but one such that the lands could no longer be seen as being for the use and benefit of the Indians. The argument was not seriously maintained, however, as it met the serious difficulty of coping with the definition given to “reserve” and “designated lands” in the Act as it now stands.[2] My colleague deals with the argument in relation to the finding of the Motions Judge that CP’s title was determinable fee simple and not fee simple absolute. In fact, in view of my colleague’s conclusion as well as mine, the argument has no bearing and it need not be analysed further. This is why, in my heading, I limit the issue of title to a choice between fee simple and easement.
[3] With respect to this first issue, I am satisfied with the review made by my colleague of the facts to be considered, the nature of the litigation and the content of the decision below. As my colleague notes, the Motions Judge’s reasons dealt at the same time with the interests of Canadian National Railway and of Canadian Pacific, whose respective applications to the same effect against the same band councils had been joined, with the result that his reasoning does not directly address the respondent’s case as opposed to Canadian National’s one. Now that Canadian National’s case has been separately submitted and disposed of by this Court,[3] the focus is more exclusive. Incidently, I agree that the decision of this Court in favour of Canadian National does not impact directly on CP’s case, but note that there may be findings there, for example that the expression “right-of-way” in the various instruments of title did not denote an easement,[4] that could have some bearing.
[4] I do not believe, anymore than my brother, that it can reasonably be disputed that the title conveyed to CP by Canada in each of the 15 conveyances at issue was on its face fee simple absolute. One of the appellants, the Matsqui Indian Band, suggested that some ambiguity arises with respect to the specific letters patent affecting their reserve if the Order in Council authorizing its issuance is considered simultaneously. My colleague deals with that suggestion and I leave it at that. As such, in both his and my estimation, the sole real issue is whether the Crown had authority to convey, as it had openly done within all the individual letters patent and grants, a fee simple title.
[5] The thrust of the appellants’ argument, as explained by my colleague, is that under the Indian Act and the Railway Act[5] in force at the time of each conveyance, the federal government lacked the authority to effect a conveyance of fee simple title, its authority being limited to the granting of an easement. Any other grant was ultra vires. The purport of the letters patent should therefore be read down accordingly. I am prepared to concede that, if the letters patent were issued on the authority of the Railway Act or subject to the provisions of the Indian Act, such an argument would no doubt be quite serious. The statutory prohibition against alienation of lands vested in the Crown found in section 99 of The Railway Act and the limitations imposed on disposition of reserve lands by the Indian Act would render quite problematic the possibility of a fee simple conveyance. In the absence of an overriding source of authority, the Crown would have probably exceeded its authority.[6]
[6] But none of the conveyances were effected under The Railway Act and in only one of the letters patent, the last one in 1968, is there a specific reference to the Indian Act. This opens the way to the respondent’s position.
[7] The respondent’s position is precisely that such an overriding authority to issue the several letters patent as they were actually issued existed, negating the provisions of the Indian Act or the Railway Act which could have limited the ability of the Crown to grant reserve land in fee simple. That authority, which is expressly referred to in many of the letters patent, was An Act respecting the Canadian Pacific Railway of 1881 (the CPR Act),[7] an act which was adopted to give effect to the contract negotiated by the government with the promoters of what was to become the Canadian Pacific Railway.
[8] Mr. Justice Robertson rejects CP’s submissions and, as a result, is led to adopt substantially the appellants’ position based on the ultra vires doctrine. In essence, my colleague does not accept that the CPR Act, or the contract annexed thereto and made formally part thereof, expresses a sufficiently clear intention on the part of Parliament to provide for conveyances in fee simple of all the lands that could be required for the railway. Analysing the four provisions relied on by the respondent in support of its submissions, he concludes that section 5 of the CPR Act and article 7 of the contract are too ambiguous to be taken as contemplating the extraordinary effect of extinguishing the Aboriginal interest in the lands, and articles 10 and 12 of the contract do not apply to the lands involved in the western segment of the railway, the only part of the railway with which we are concerned.
[9] As my understanding of the CPR Act and my analysis of the four provisions referred to differ from that of my colleague, I must respectfully support a conclusion opposite to his.
[10] Let me introduce my analysis of those provisions by three comments, two of general interest and one of more direct and immediate consequence to my reasoning.
[11] My first comment is simple enough. It is perhaps more important with respect to the CPR Act than with most other pieces of legislation that one come to it bearing in mind the very special historical circumstances in which it came into being. My colleague, in his reasons, is clear enough in this respect and I need not go into it in detail. It will not be useless, nevertheless, to refer again to the preamble to the CPR Act which speaks: of the commitment taken by the federal government in the Act of Union bringing the colony of British Columbia into Canada [British Columbia Terms of Union, R.S.C., 1985, Appendix II, No. 10] to construct a railway that would connect the seaboard of the new province with the railway system of the rest of the country; of the failure of the government to satisfy its obligation within the time frame of ten years that had been contemplated; of the perceived necessity to do all that was required to complete what had been commenced; and finally, of the direct involvement of the good faith and the honour of the Government in finding, at last, a viable solution. That a piece of legislation passed under such circumstances was meant to produce extraordinary effects should surprise no one. In delivering judgment in the Vancouver, (City of) v. Canadian Pacific Ry. Co.,[8] the Supreme Court was quite clear to that effect:
The object of … [An Act Respecting the Canadian Pacific Railway Act] plainly was … to give to the company incorporated for the construction of this great public national work extending over the continent … much greater powers and privileges than were given to the railway companies of purely commercial character constructed under the provisions of the Railway Act of 1879 ….
And again, in Canadian Pacific Ry. Co. v. James Bay Ry. Co.,[9] Girouard J., after noting the failure of earlier legislation and other efforts to meet the obligation imposed by the Terms of Union, wrote:
As it may easily be understood from the past experience more extensive and, in fact, unprecedented powers were demanded and obtained. To do so the whole policy of the country, as expressed in the Railway Act of 1879, had to be set aside and a new and exceptional one adopted.
[12] My second comment is more involved. It could be more satisfactory if we were better informed as to all the facts that surrounded and followed the enactment of the CPR Act and the contract it was giving effect to. Although we know that lands along the so-called “railway belt” were granted by the province to the Dominion government by the terms of An Act to grant public lands on the Mainland to the Dominion in aid of the Canadian Pacific Railway, 1880,[10] which was modified, following further Provincial-Dominion consultations, by An Act relating to the Island Railway, the Graving Dock, and Railway Lands of the Province,[11] we are in the dark as to when and how the reserves between Kamloops and Moody Bay were created.
[13] Counsel for both sides during the course of the hearing maintained that the reserves were created in the latter years of the 1870’s, just prior to the enactment of the CPR Act and the granting of the railway belt to the Dominion government. And, in fact, such dates would appear to conform with work of the joint Provincial-Dominion Indian Reserve Commission for British Columbia established by reciprocal Orders in Council in 1876. However, the status of the reserves delineated by the Commission remained unclear due to the failure of the provincial government in Victoria to approve and gazette reserve allotments.[12] As a result, it was not until many years later that the existence of those reserves was “confirmed”.
[14] A certain degree of ambiguity also would seem to exist with respect to events surrounding the conveyance of lands to Canadian Pacific. Why did these conveyances take place years, if not decades, after the beginning and presumably the completion of the western section of the railway? In certain cases, the explanation may be that the lands taken were not used in the construction of the main line. For example, the 1891 conveyance of lands located within the Matsqui reserve mentions not the construction of the main line but rather the construction of the Mission Branch line. In other instances, it is suggested that the conveyance followed a realization that the line as built did not follow the originally planned route, occupying more land than was initially contemplated. This appears to be what is to be understood from the following extract from a Privy Council Order dated May 23, 1930:[13]
The Committee of the Privy Council have had before them a report, dated 14th May, 1930, from the Superintendent General of Indian Affairs, submitting that the Cook’s Ferry Indian Reserve No. 4A was confirmed by Order in Council P.C. 2410, dated 31st October, 1890. The right of way of the Canadian Pacific Railway was excepted and taken to be 100 feet in width. The railway is constructed on a steep hillside and the plans as finally approved by the Board of Railway Commissioners shows a varying width of from 425 to 450 feet. The right of way does not touch the water, the extra width being on the mountain side. The department of Interior is under obligation to hand over the required right of way to the Canadian Pacific Railway free of charge.
The situation is somewhat confusing.
[15] In the end, however, despite the existence of blank spots in the historical record, and a resulting fuzziness in my perception of the events leading to the drawing up of the letters patent at issue, the historical record following the enactment of the CPR Act does not appear to me to be really relevant. As to reserve creation, no arguments have been put forward suggesting that the lands should not be seen as having been in reserves due to the interplay between the dates of delineation, the date of the granting of the “railway belt” and the dates of reserve confirmations. Certainly the letters patent assume that the lands were reserved lands and I have no difficulty with that assumption. With respect to the reasoning and timing of the individual conveyances, while some clarification might grant one a greater perception of the processes involved in the development of the railway, what is relevant for our purpose is not the rationale behind each individual conveyance but rather its legality in so far as it discloses the granting of a fee simple. This involves not an analysis of the historical record but rather an analysis of the relevant provisions of the CPR Act as the authority on which each individual conveying document has been issued.
[16] My third comment will be to make a point which, in my reasoning, is absolutely basic. A reading of the letters patent informs us unequivocally that everyone involved in their issuance took the position that the lands on which the railway completed by the government was constructed were to be conveyed separately from the railway itself. This is evident by the fact that the letters patent falling within the group A model of the respondent’s classification speak first of the obligation on the part of the government to turn over the railway to the Company before turning to the conveyance of the lands over which the railway runs. Such conveyances are identically phrased as follows:
WHEREAS under the provisions of the Act, of the Parliament of Canada passed in the Forty-fourth year of the Reign of Her late Majesty Queen Victoria, Chaptered 1 and entitled “An Act Respecting the Canadian Pacific Railway” and by the terms and conditions of the contract and agreement embodied in the said Act and particularly by the terms and conditions of Section 5 of the said Act and Section 7 of the said contract the Canadian Pacific Railway (hereinafter called “the Company”) is entitled to have conveyed to it the portions of the said railway constructed by the Government .
AND WHEREAS the lands hereinafter described are lands to a conveyance of which the Company is entitled under the provisions of the said Act and contract. [Emphasis added.]
[17] There is no reason to believe that this dichotomy was not within the state of mind of the parties to the contract as well as that of Parliament on enacting the Act. Such a conclusion makes sense, in my view. It makes sense for this first reason. These lands, as we have just seen, had been granted by British Columbia to the Dominion in aid of the Canadian Pacific Railway in 1880. As my colleague notes, neither the construction of a railway nor the running of a railway, for that matter, necessarily requires the ownership of the lands associated with its construction or operation. Thus, in my view, it is perfectly natural that, given an obligation to convey both the railway and the lands, the contract would treat the lands and railway separately. One could not speak of accession to the lands if only the railway was to be transferred. And it makes sense for another reason. The railway to be built by the government could not be seen as covering all the lands that would be needed for the operation of the final and fully operative railway along the western segment, since it presumably did not contemplate branches[14] and the possible eventual necessity to widen the right-of-way to allow for a second track.[15]
[18] Now, with those preliminary comments in mind, let us examine those provisions of the CPR Act and the contract that are potentially applicable, i.e. section 5 of the Act and articles 7, 9, 10, 11, 12 and 14 of the contract:
The CPR Act
5. Pending the completion of the eastern and central sections of the said railway as described in the said contract, the Government may also transfer to the said Company the possession and right to work and run the several portions of the Canadian Pacific Railway as described in the said Act thirty-seventh Victoria, chapter fourteen, which are already constructed, and as the same shall be hereafter completed; and upon the completion of the said eastern and central sections the Government may convey to the Company, with a suitable number of station buildings, and with water service (but without equipment), those portions of the Canadian Pacific Railway constructed, or agreed by the said contract to be constructed by the Government, which shall then be completed; and upon completion of the remainder of the portion of the said railway to be constructed by the Government, that portion also may be conveyed by the Government to the Company, and the Canadian Pacific Railway defined as aforesaid shall become and be thereafter the absolute property of the Company; the whole, however, upon the terms and conditions, and subject to the restrictions and limitations contained in the said contract.
The Contract
7. The railway constructed under the terms hereof shall be the property of the Company; and pending the completion of the Eastern and Central sections, the Government shall transfer to the Company the possession and right to work and run the several portions of the Canadian Pacific Railway already constructed or as the same shall be completed. And upon the completion of the Eastern and Central sections, the Government shall convey to the Company, with a suitable number of station buildings and with water service (but without equipment), those portions of the Canadian Pacific Railway constructed or to be constructed by the Government which shall then be completed; and upon completion of the remainder of the portion of railway to be constructed by the Government, that portion shall also be conveyed to the Company; and the Canadian Pacific Railway shall become and be thereafter the absolute property of the Company. And the Company shall thereafter and forever efficiently maintain, work and run the Canadian Pacific Railway.
…
9. In consideration of the premises, the Government agree to grant to the Company a subsidy in money of $25,000,000, and in land of 25,000,000 acres, for which subsidies the construction of the Canadian Pacific Railway shall be completed and the same shall be equipped, maintained and operated,—the said subsidies respectively to be paid and granted as the work of construction shall proceed, in manner and upon the conditions following, that is to say:—
a. The said subsidy in money is hereby divided and appropriated as follows, namely:—
CENTRAL SECTION.
…
EASTERN SECTION.
…
And the said subsidy in land is hereby divided and appropriated as follows, subject to the reserve hereinafter provided for:—
CENTRAL SECTION.
…
EASTERN SECTION.
…
10. In further consideration of the premises, the Government shall also grant to the Company the lands required for the road bed of the railway, and for its stations, station grounds, workshops, dock ground and water frontage at the termini on navigable waters, buildings, yards and other appurtenances required for the convenient and effectual construction and working of the railway, in so far as such land shall be vested in the Government….
11. The grant of land hereby agreed to be made to the Company, shall be so made in alternate sections of 640 acres each, extending back 24 miles deep, on each side of the railway, from Winnipeg to Jasper House, in so far as such lands shall be vested in the Government,—the Company receiving the sections bearing uneven numbers. But should any of such sections consist in a material degree of land not fairly fit for settlement, the Company shall not be obliged to receive them as part of such grant; and the deficiency thereby caused and any further deficiency which may arise from the insufficient quantity of land along the said portion of railway, to complete the said 25,000,000 acres, or from the prevalence of lakes and water stretches in the sections granted (which lakes and water stretches shall not be computed in the acreage of such sections), shall be made up from other portions in the tract known as the fertile belt, that is to say, the land lying between parallels 49 and 57 degrees of north latitude, or elsewhere at the option of the Company, by the grant therein of similar alternate sections extending back 24 miles deep on each side of any branch line or lines of railway to be located by the Company, and to be shown on a map or plan thereof deposited with the Minister of Railways; or of any common front line or lines agreed upon between the Government and the Company,—the conditions hereinbefore stated as to lands not fairly fit for settlement to be applicable to such additional grants. And the Company may with the consent of the Government, select in the North-West Territories any tract or tracts of land not taken up as a means of supplying or partially supplying such deficiency. But such grants shall be made only from lands remaining vested in the Government.
12. The Government shall extinguish the Indian title affecting the lands herein appropriated, and to be hereafter granted in aid of the railway.
…
14. The Company shall have the right, from time to time, to lay out, construct, equip, maintain and work branch lines of railway from any point or points along their main line of railway, to any point or points within the territory of the Dominion. Provided always, that before commencing any branch they shall first deposit a map and plan of such branch in the Department of Railways. And the Government shall grant to the Company the lands required for the road bed of such branches, and for the stations, station grounds, buildings, workshops, yards and other appurtenances requisite for the efficient construction and working of such branches, in so far as such lands are vested in the Government.
[19] My colleague speaks of ambiguity in section 5 and article 7 to the extent that they do not refer to the quality of title to be conveyed to Canadian Pacific. I would not have thought that the expression “absolute property” therein could refer to any other concept than full ownership in fee simple. But, in any event, my difficulty with those provisions is their applicability to lands. It may very well be that the railway and the land it covers being definitely united, the “absolute property” concept should be interpreted as covering both. In such an event, the terms used give the impression that concepts of limited interest, such as the granting of an easement, whether statutory or otherwise, were far from the minds of the drafters.
[20] But in fact, based on my third preliminary comment above, I do not believe that section 5 and article 7 were meant to cover the lands. Leaving aside for the moment article 12, to which I will come afterwards, articles 9, 10, 11 and 14 are the only provisions of the Act or the contract that speak openly of lands. Articles 9 and 11 are linked as they both refer to the subsidy lands to be granted to the Company for the purposes of settlement and article 14 relates exclusively to the eventual construction of branches. Article 10 is the only one that may cover lands directly and immediately associated with the railway. Article 10, in my understanding, is a provision of general application which refers at once to the lands that were required for the roadbed and the lands that were to be required for the convenient and effectual construction and working of the railway, wherever be the segment concerned.
[21] This leads us to article 12. On my analysis of articles 10 and 11 and the very wording of this article 12, it appears to me that the three articles are undoubtedly linked. Article 12 speaks first of “the lands herein appropriated” and then of lands “to be hereafter granted in aid of the railway”. That we have there references to two different groups of land is, in my view, clear on the structure of the sentence and the words used, both being highlighted by the presence of a comma after the word “appropriated”.[16] Subsidy lands described within article 11 would appear, by the use of the phrase “divided and appropriated as follows “, as found within article 9, to be included in article 12’s “lands herein appropriated”. According to the terms of article 11, certain appropriated lands may be rejected by the Company in favour of as then ill-defined lands. It may be that such lands could be described, due to their lack of definition, as being “hereafter granted” and that such an interpretation limits the effect of article 12 to subsidy lands. However, to so find would, in my view, improperly limit the meaning of the phrase “granted in aid of the railway”. The reference to the railway rather than the Company indicates that what is being referred to is not simply subsidy lands but also lands upon which the railway runs or upon which its necessary appurtenances sit. This is as subsidy lands, while not ancillary to the financial viability of the Company nor of the enterprise itself, are in fact ancillary to the railway qua railway. As such, article 12 is a general provision applicable to all lands that are to be conveyed in the implementation of the Act whether the granting or appropriation of such lands stems from the interplay of articles 9 and 11 or from the provisions of article 10.
[22] I take comfort with the interpretation I give to articles 10 and 12 in that it appears to me the only one that could give effect to the rational intentions of the Company. I can see no reason why the Company would seek to own the land upon which its tracks will run in the eastern and central sections of the track, but have no corresponding interest in the ownership of such lands with respect to the western section. Having a desire to secure ownership of such lands throughout the length of its operations, it is evident to me that the Company would seek to secure an absolute interest in lands so conveyed by ensuring the extinguishment of any aboriginal interest in those lands, irrespective of geographic location.
[23] It is on the basis of this analysis that I must, with respect, disagree with my colleague as to the purport of the CPR Act. In my understanding, the CPR Act was meant to confer on the government the power and the obligation to convey all of the lands required for the railway with respect to any of its three segments in fee simple, free of any Indian interest.
[24] It will have been noted, no doubt, that I refuse to accept the analysis of the Motions Judge which made him qualify the title conveyed to CP as determinable fee simple. It is by reference to the language of the statute involved and the particular document of conveyance used, with the possible help of agreements that may have preceded or behaviour that may have followed, that the nature of a property interest granted to a party like a railway company must be determined.[17] There is nothing in the CPR Act nor in the various conveying documents issued on its authority that would suggest the granting of a title other than fee simple. The mere mention of the purpose of the conveyance within the recitals of individual letters patent cannot be seen as a qualification limiting the effect of operative clauses which clearly grant such an interest. Nevertheless, in spite of my disagreement with the analysis of the Motions Judge, I believe, contrary to Mr. Justice Robertson, that he was right in finding that the lands in the railway right-of-way traversing the reserves are not lands within the reserves upon which the appellants would have a power of taxation.
II
The Discrimination Issue
[25] There is, as mentioned at the outset, a second issue that was submitted to the Motions Judge. CP and Unitel Communications Inc. raised an alternative ground in support of their judicial review applications. They contended that the by-laws on the basis of which the assessments had been issued were invalid because they were discriminatory, in that they provided for variable tax rates for different classes of property within the territory of the reserves. The learned Motions Judge dealt with the argument and accepted it to a certain extent. He agreed that the band councils, in the exercise of their new taxation power given by section 83 of the Indian Act, could impose variable rates with respect to different classes of property, but they could not, as they had not been specifically authorized to do so, discriminate as between classes of people. It followed that, in so far as the by-laws purported to impose a tax on the respondents’ interests within the reserves, while exempting the similarly situated property of band members, they were invalid. In spite of the position I take on the main issue, in view of the manner in which the Motions Judge finally disposes of this alternative contention, in effect declaring the by-laws invalid in part if they were to be applicable, I cannot simply leave the matter aside, the more so since there are other interests than those of the parties which may be affected.
[26] Mr. Justice Robertson takes the view that the learned Motions Judge was wrong in concluding, as he did, that the by-laws were invalid for being discriminatory and I completely agree. Basically, like Mr. Justice Robertson, I fail to understand the rationale behind the distinction made by the Motions Judge between the possibilities of different treatments that he considers impliedly authorized and those he rejects, since, in all cases, it is the taxpayers who are targeted. My colleague’s reasons for rejecting the Motions Judge’s finding are clear enough and compelling but nevertheless I wish to add a few brief comments of my own.
[27] Since the earliest Indian Act provisions, Indian people have been assured of a quite significant privilege of tax exemption with respect to the use and occupation of their reserve lands, a privilege expressed in general terms and accorded to each individual Indian. It is to me inconceivable that Parliament could have made the exercise by the bands of their new tax-levying power—a power they have been claiming for a long time in their quest for greater autonomy—subject to an implicit forced renunciation by all their members of that basic privilege, without taking care to spell it out in unequivocal terms. The qualification to the opening reservation of section 87 of the Indian Act , namely: “Notwithstanding any other Act of Parliament or any Act of the legislature of a province, but subject to section 83, the following property is exempt from taxation”, was added to allow band councils to collect taxes from their members if they chose to do so; it cannot be taken as if it said, for example, “but subject to the exercise by a band of any power given to it by section 83”. In other words, the reservation is there to create an option but not to impose an obligation.
[28] The learned Motions Judge speaks of the possibility of abuse. However, it seems to me that any such fear should be greatly alleviated by the realization that all such taxing by-laws must be approved by the Minister of Indian Affairs. On the other hand, the notion of discrimination which is being invoked is not easy to grasp. Where one speaks of the elements of the special status of a group of individuals within the community as determined by Parliament, one can speak of inequality, of course, but not necessarily of discrimination.
[29] Finally, it appears to me quite inappropriate to apply to Indian bands’ new by-law powers the principles of interpretation developed in municipal law. There is a big difference between municipalities and Indian bands in that the existence of the Indian groupings is not like that of municipal units, wholly dependant on an act of government authority, and the rationale behind the granting of taxation powers to both such bodies is clearly not the same. The devolved taxation powers of municipalities exists, to my mind, only to further governmental objectives of efficiency in operation and administration. The recent granting of taxation powers to Indian bands has a much broader and humane objective, which can only be seen in the context of furthering the ability of natives to govern themselves and thus, to a certain extent, invokes rights and responsibilities that predate all Indian acts. It would be wrong, in my view, to subject both sets of rules to the same standard of inflexibility, rigidity and limitation.
[30] It is clear to me that the finding of the learned Motions Judge on the second alternative issue raised by the respondents cannot be allowed to stand.
[31] My conclusion in the end is therefore that, in spite of my disagreement with the findings of the Motions Judge, especially on the discrimination issue, his main conclusion that the judicial review applications were well founded, is to be upheld.
[32] I would therefore dismiss the appeals with costs provided, however, that only one set of costs be awarded for the hearing.
* * *
The following are the reasons for judgment rendered in English by
[33] Desjardins J.A.: I have had the advantage of reading the reasons for judgment of my colleagues Marceau and Robertson JJ.A. I agree with Robertson J.A. that the lands comprising the rights-of-way of Canadian Pacific are “in the reserve” within the meaning of section 83 of the Indian Act[18] (the Act). I respectfully disagree, however, with his views on whether the by-laws are valid. The taxation by-laws adopted by the appellants which exempt from taxation Indians’ interests in land are, in my opinion, discriminatory. They run counter to fundamental principles of administrative law. For the reasons that follow, I conclude that these by-laws are invalid.
[34] The appellants’ taxation by-laws have been designed so as to exempt from taxation all of the interests held by band members and the bands themselves in reserve lands.
[35] The Matsqui Indian Band Property Taxation By-Law assesses all real property except:
(1) real property which is held by the Band and used by it for band purposes;
(2) the interests of Band members in real property in their reserve;
(3) the interests in real property of a corporation whose shares are held exclusively and beneficially by Band members;[19]
(4) the interests of an Indian, as defined by the Act, in that Indian’s real property.[20]
[36] The Skuppah,[21] Seabird Island,[22] Cook’s Ferry[23] and Boothroyd[24] taxation by-laws impose a tax on land and interests in land, with a number of exceptions. The land interests exempted from taxation are:
(1) land occupied or held by a member of the band;
(2) land occupied or held by the band; and
(3) land occupied or held by a body corporate owned or controlled by the band.
[37] Like my colleague Robertson J.A., I have reservations about whether a corporation, even though all its shareholders may be status Indians, is itself an “Indian” for taxation purposes so as to enable it to claim an exemption from taxation in respect of reserve land it holds or occupies.[25] But this issue is not before us.
[38] The taxation by-laws at issue were approved by the Minister of Indian Affairs and Northern Development, on March 9, 1992, pursuant to section 83 of the Act.
[39] The coming into force of these taxation by-laws did not subject Canadian Pacific to double taxation. Under section 11 of the Indian Self Government Enabling Act,[26] when an Indian band enacts taxation by-laws, persons subject to taxation under those by-laws are exempt from taxation under provincial enactments.
[40] The British Columbia Assessment Authority (BCAA) was appointed by the appellant Indian bands as assessor under their by-laws. The BCAA sent out property assessment notices on behalf of the appellants to Canadian Pacific sometime prior to May 8, 1992. Rather than using the appeal procedure provided for in the by-laws, Canadian Pacific filed an originating notice of motion seeking judicial review and challenging the application of the by-laws to its rights-of-way.
[41] One of Canadian Pacific’s objections to the by-laws was that they tax only the interests of non-Indians in reserve land.
[42] The issue before us is, therefore, whether these by-laws contravene the fundamental rule of administrative law that the power to make by-laws does not include the power to enact discriminatory provisions unless the authorizing legislation allows their adoption.
[43] On the issue of discrimination, the Motions Judge stated:[27]
I am satisfied that the by-laws with regard to discriminating amongst various types of property, even though not outlined in the powers given to the band, are valid.
However, it is also my view that Parliament never intended to grant powers to the Indian bands to exempt certain individuals from being taxed and certain others from not being taxed. This can lead to all kinds of abuse. Had it been Parliament’s intention to grant such powers it may very well do so. I am not deciding that matter. All I am saying is that Parliament would have clearly stated this if that is what they intended. Therefore, I sever that part from the by-laws that discriminate as between persons. [My emphasis.]
[44] Canadian Pacific argues that the effect of the appellants’ property tax by-laws is to impose the entire burden of taxation on the respondents who receive none of the services funded by the taxes. If the appellants’ submissions are correct, Canadian Pacific says, Parliament would have empowered Indian bands to fund local services at any level they wish and to impose the entire costs of such services on industrial land users.
[45] Canadian Pacific argues that nothing in section 83 of the Act authorizes discrimination between lands based upon the identity of their owners.
[46] I agree.
[47] The relevant portions of subsections 87(1) and (2) of the Act read:
87. (1) Notwithstanding any other Act of Parliament or any Act of the legislature of a province, but subject to section 83, the following property is exempt from taxation, namely,
(a) the interest of an Indian or a band in reserve lands or surrendered lands; and
(b) the personal property of an Indian or a band situated on a reserve.
(2) No Indian or band is subject to taxation in respect of the ownership, occupation, possession or use of any property mentioned in paragraph (1)(a) or (b) or is otherwise subject to taxation in respect of any such property. [Emphasis added.]
[48] According to this provision, the interest of an Indian or a band in reserve lands or surrendered lands and the personal property of an Indian or a band situated in a reserve are protected from taxation by either Parliament or the legislature of a province. Moreover, no Indian or band is subject to taxation in respect of the ownership, occupation, possession or use of this type of property, or is otherwise subject to taxation in respect of any such property.
[49] The purpose of the section 87 exemption was set out in Mitchell v. Peguis Indian Band, by La Forest J.:[28]
[The purpose is to] guard against the possibility that one branch of government, through the imposition of taxes, could erode the full measure of the benefits given by that branch of government entrusted with the supervision of Indian affairs….
In summary, the historical record makes it clear that ss. 87 and 89 of the Indian Act, the sections to which the deeming provision of s. 90 applies, constitute part of a legislative “package” which bears the impress of an obligation to native peoples which the Crown has recognized at least since the signing of the Royal Proclamation of 1763. From that time on, the Crown has always acknowledged that it is honour-bound to shield Indians from any efforts by non-natives to dispossess Indians of the property which they hold qua Indians, i.e., their land base and the chattels on that land base.
It is also important to underscore the corollary to the conclusion I have just drawn. The fact that the modern-day legislation, like its historical counterparts, is so careful to underline that exemptions from taxation and distraint apply only in respect of personal property situated on reserves demonstrates that the purpose of the legislation is not to remedy the economically disadvantaged position of Indians by ensuring that Indians may acquire, hold, and deal with property in the commercial mainstream on different terms than their fellow citizens.
[50] In Williams v. Canada,[29] Gonthier J. restated the purpose in the following terms:
[The purpose is to] preserve the entitlements of Indians to their reserve lands and to ensure that the use of their property on their reserve lands was not eroded by the ability of government to tax …. The corollary of this conclusion was that the purpose of the sections was not to confer a general economic benefit upon the Indians ….
[51] Section 87 of the Act declares that within the specified limits, Indians are exempt from taxation by federal and provincial governments. As the interplay between section 83 and 87 makes clear, the exemption in section 87 is restricted to taxation by non-Indian governments.
[52] This exemption is, however, said to be “subject to section 83”.
[53] The relevant parts of section 83 of the Act read as follows:
83. (1) Without prejudice to the powers conferred by section 81, the council of a band may, subject to the approval of the Minister, make by-laws for any or all of the following purposes, namely,
(a) subject to subsections (2) and (3), taxation for local purposes of land, or interests in land, in the reserve, including rights to occupy, possess or use land in the reserve;
…
(2) An expenditure made out of moneys raised pursuant to subsection (1) must be so made under the authority of a by-law of the council of the band.
(3) A by-law made under paragraph (1)(a) must provide an appeal procedure in respect of assessments made for the purposes of taxation under that paragraph.
(4) The Minister may approve the whole or a part only of a by-law made under subsection (1). [Emphasis added.]
[54] The purpose of paragraph 83(1)(a) of the Act, adopted in 1988 by what is known as the Kamloops Amendments,[30] was explained in Canadian Pacific Ltd. v. Matsqui Indian Band[31] by Lamer C.J., writing for himself and Cory J. at paragraph 18:
… it is important that we not lose sight of Parliament’s objective in creating the new Indian taxation powers. The regime which came into force in 1988 is intended to facilitate the development of Aboriginal self-government by allowing bands to exercise the inherently governmental power of taxation on their reserves. Though this Court is not faced with the issue of Aboriginal self-government directly, the underlying purpose and functions of the Indian tax assessment scheme provide considerable guidance in applying the principles of administrative law to the statutory provisions at issue here. I will therefore employ a purposive and functional approach where appropriate in this ruling.
[55] At paragraph 43 [pages 33-34], he said:
Here, the evidence indicates that the purpose of the tax assessment scheme is to promote the interests of Aboriginal peoples and to further the aims of self-government. Although the scheme resembles the kind of tax assessment regime we see at the municipal level of government in Canada, it is more ambitious in what it sets out to achieve. The scheme seeks to provide governmental experience to Aboriginal bands, allowing them to develop the skills which they will need for self-government. [Emphasis added.]
[56] The Kamloops Amendments were again explained by Lamer C.J. in St. Mary’s Indian Band v. Cranbrook (City):[32]
The stated purpose of the Kamloops Amendments is unequivocal. When introducing the new amendments to Parliament, the government made it clear that they were intended to clarify the status of surrendered lands and to draw lands surrendered for lease[33] into the definition of reserve, primarily for the purpose of taxation. At that time, the Parliamentary Secretary to the Minister of Indian Affairs and Northern Development made the following statement (House of Commons Debates, vol. XIII, 2nd sess., 33rd Parl., June 2, 1988, at pp. 16046-47):
There are two main purposes to this Bill: first, to clarify the legal status of Indian lands; second, to establish the legal foundation for property taxation by band councils ….
The Bill before us will establish that a surrender may take one of two forms—first, an absolute surrender for sale which would remove land completely of all Indian interests and take it out of reserve, which is extremely rare, and, second, a surrender for lease or some other restricted purpose, in which case the land remains part of the reserve. Setting aside part of a reserve for leasing is not a surrender, nor is it a release of the Indian interest in the land.
In order to facilitate and strengthen the distinction between these two types of surrender, land surrendered for lease would be termed “designated land” and the process of such non-absolute surrender would be termed “designation”. This terminology is obviously far superior to the word “surrender”, and the symbolic importance of this change is of great value.
As a result of these amendments Indian communities will be able to set land aside for development without fear of losing the Indian status of the land. The rights they obtain through the Indian Act will continue to apply, such as voting rights in band elections, protection of cultural property, and the power to govern the land through by-laws.
The last point is very important. At present it is not a all clear in the Indian Act whether the word “reserve” includes surrendered land of any type. There is, therefore, a risk that when land is surrendered for lease it might cease to be defined as part of the reserve and the by-law powers of the band council could not govern the land. This is a totally unacceptable loss of Indian jurisdiction and control of Indian land. It would also mean a very serious vacuum of local jurisdiction over leased Indian land. This has taken place in many instances across Canada and is why the band at Kamloops requested the change. This situation cannot be permitted to continue.
One of the most important by-law powers that bands need is their power to tax use of the land. That brings me to the second purpose of these amendments, which is to establish clearly that band councils have the power to tax any interest or use of reserve lands in order to defray their costs as the government of that land. Such taxation power is obviously indispensable to any form of modern government. Some bands may not wish to use this power, but it must be there for bands which wish to exercise it. [Emphasis added.]
[57] I interpret paragraph 83(1)(a) of the Act when read in conjunction with section 87 as allowing the council of a band, with the approval of the Minister, to run counter to section 87 and to tax for local purposes land or interests in land in the reserve, including rights to occupy, possess or use land in the reserve.
[58] This new power of bands, by its terms, encompasses the power to tax land and interests in land of both Indians and non-Indians situated in the reserve. Parliament has permitted band councils to do what Parliament and the legislatures of the provinces are prohibited from doing by the wording of section 87 of the Act, namely to tax Indian interests in reserve lands. While it may be against the honour of the Crown for Parliament and the provincial legislatures to tax Indian interests in reserves, certainly Parliament, as a sovereign legislature acting under class 24 of section 91 of the Constitution Act, 1867 [30 & 31 Vict., c. 3 (U.K.) (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1) [R.S.C., 1985, Appendix II, No. 5]], can allow Indians to tax Indian interests in Indian reserves.
[59] The Boothroyd Indian Band and the Boothroyd Indian Band Council claim that this cannot be so. Since the earliest Indian legislation, they argue, Indian people have enjoyed a tax exemption with respect to the use and occupation of their reserve land. They submit that the taxation powers under paragraph 83(1)(a) of the Act were never intended to mean that their use by band councils would deprive them of the tax exemption which Indians have always enjoyed. They submit that if Parliament had intended to impose on band councils the obligation to tax their members, if they were to use their taxing powers at all, this intention would have been clearly expressed. The proceedings of Parliament and the Senate, with respect to the 1988 amendments to the Act, show that it was the intention of Parliament to ensure that bands could tax non-Indian occupations of reserve land while preserving the tax exemption of bands and band members with respect to their interests in the reserve.
[60] The Indian Taxation Advisory Board submitted a similar argument. It suggests that nothing requires that bands who wish to enter the field of taxation under section 83 of the Act must give up the tax exemption enacted by Parliament in section 87. Section 83, it says, should be interpreted so as to uphold the honour of the Crown in this regard.
[61] Chief Jules of the Kamloops Indian Band, who is the Chairman of the Indian Taxation Advisory Board, stated, in an affidavit, that consultations were held with First Nations prior to the introduction in the House of the Kamloops Amendments. Concerns were expressed frequently about whether the proposed changes meant that bands would be required to tax their own members. They received legal advice from government authorities that they would not have to do this. They were told that if the taxation by-laws were properly drafted, the exemption contained in section 87 of the Act could be incorporated into by-laws enacted under section 83 of the Act. Based on discussions with the office of the Minister of Indian Affairs and Northern Development, Chief Jules says he then assured the First Nations with whom he spoke that they would not be required, in enacting taxation by-laws, to tax their own members. Moreover, he said, the Minister of Indian Affairs and Northern Development, in a letter attached to a publication entitled “Proposed Amendments to the Indian Act”, issued on August 31, 1987, indicated to the chiefs and council members that the effect of the proposed amendments “will not involve any unintentional or additional loss of Indian rights or powers”. Chief Jules added that he testified to that effect before the Senate Committee on Legal and Constitutional Affairs. He said:
One of the notions that has worried many of the Indian chiefs is: Does this mean that I will have to begin to tax my own membership? Of course, the right for taxation exemption is a struggle that Indian people have undertaken, and it has been an historical position of Parliament to exempt Indian people. Indian chiefs were worried that this might mean they would have to start taxing all of their membership. Section 87 of the Indian Act gives a personal property exemption from taxation. Therefore, a band only has to incorporate an exemption, which Parliament has already given bands and individuals, as part of their bylaw. In that way they would not tax their own membership.
[62] Paragraph 83(1)(a) of the Act, as I see it, does not reflect Chief Jules’ expectations. Section 87 is a limit on the powers of Parliament and the legislatures of the provinces. It declares certain Indian interests exempt from taxation, notwithstanding what the acts of those legislative bodies may say. Section 87 is essentially a protective measure in favour of Indians.
[63] By contrast, paragraph 83(1)(a) of the Act is an empowering provision, albeit a limited one. It gives band councils the power to tax interests in the reserve. There are no words in paragraph 83(1)(a) of the Act which guarantee to Indians that they will not be taxed by their band councils.
[64] If the legislative intent was to reflect, in paragraph 83(1)(a) of the Act, the principle embodied in section 87, Parliament could only have done this by protecting Indian interests in the reserve from taxation by band councils. Such an intent is not to be found in paragraph 83(1)(a) of the Act, as drafted, neither in the express words, nor by necessary implication. Section 87 is “subject to section 83”. One does not find, in section 87 nor in paragraph 83(1)(a) of the Act, that, notwithstanding taxation by-laws adopted by band councils, interests of Indians in the reserve remain exempt from taxation.
[65] No liberal or generous interpretation of paragraph 83(1)(a) of the Act is possible. The spirit of section 87 is simply not there. What paragraph 83(1)(a) does is to empower band councils to tax all interests in the reserve, whether they are Indian or non-Indian interests. Paragraph 83(1)(a) does not exempt Indian interests from the taxing power of band councils, as section 87 does with regard to acts of Parliament and the provincial legislatures.
[66] Moreover, to read paragraph 83(1)(a) of the Act as if it were to leave this historical exemption of Indians from taxation at the discretion of the band councils, for them to apply, as the appellants submit, runs counter to another fundamental principle of law which is found in Montréal (City of) v. Arcade Amusements Inc. et al.[34] where Beetz J., for the Court, stated:[35]
The rule that the power to make by-laws does not include that of enacting discriminatory provisions unless the enabling legislation provides the contrary has been observed from time immemorial in British and Canadian public law.
[67] Beetz J. reviewed the British and Canadian authorities in support of this proposition. He cited, in particular, the following extract of Louis-Philippe Pigeon in Rédaction et interprétation des lois, 1978, at page 34:[36]
[translation]
Another important observation has to be made regarding the regulatory power. It is the following: the power to make regulations does not include a power to adopt discriminatory provisions. In other words, unless the legislation authorizing it states the contrary a regulation must apply to everyone in the same way. If the intent is to make a distinction, this must be stated. One of the interesting decisions on this point is Rex v. Paulowich, [1940] 1 W.W.R. 537; and there are many others. [My emphasis.]
[68] Later in his judgment, he elaborated further:[37]
It must be held that, in the absence of express provisions to the contrary or implicit delegation by necessary inference, the sovereign legislator has reserved to itself the important power of limiting the rights and freedoms of individuals in accordance with such fine distinctions. The principle transcends the limits of administrative and municipal law. It is a principle of fundamental freedom.
[69] In R. v. Sharma,[38] Iacobucci J., for the Court, referred again to the decision of Montréal (City of) v. Arcade Amusements Inc. et al. and said:
In that case, the Court held that the power to pass municipal by-laws does not entail that of enacting discriminatory provisions (i.e., of drawing a distinction) unless in effect the enabling legislation authorizes such discriminatory treatment. See also Rogers, The Law of Canadian Municipal Corporations (2nd ed. 1971), at pp. 406.3-406.4:
It is a fundamental principle of municipal law that by-laws must affect equally all those who come within the ambit of the enabling enactment. Municipal legislation must be impartial in its operation and must not discriminate so as to show favouritism to one or more classes of citizens. Any by-law violating this principle so that all the inhabitants are not placed in the same position regarding matters affected by it is illegal.
The general principle does not apply where the enabling statute clearly specifies that certain persons or things may be excepted from its operation or expressly authorizes some form of discrimination.
The rule against discriminatory by-laws is an outgrowth of the principle that, as statutory bodies, municipalities “may exercise only those powers expressly conferred by statute, those powers necessarily or fairly implied by the expressed power in the statute, and those indispensable powers essential and not merely convenient to the effectuation of the purposes of the corporation” (Makuch, Canadian Municipal and Planning Law (1983), at p. 115). [Emphasis added.]
[70] The appellants claim, however, that both Montréal (City of) v. Arcade Amusements Inc. et al. and R. v. Sharma dealt with municipal powers. Band councils, they submit, are not municipalities.
[71] The Boothroyd Indian Band and the Boothroyd Indian Band Council argue that, unlike a municipality, the band is not a creature of statute. First Nations existed and exercised powers of self-government. They cite in support the cases of R. v. Sioui;[39] Cook’s Ferry Band. (Members of) v. Cook’s Ferry Band;[40] and Canadian Pacific Ltd. v. Matsqui Indian Band.[41]
[72] There is no question that Indians and Indian bands have a long history of special relationship with the Crown. The case of R. v. Sioui illustrates well the capacity of the Hurons to sign a treaty with the British Crown in 1760, three years before New France itself was ceded to the British Crown. But, at one point in history, self-government for the Indians and the Indian bands meant self-government within Canada.
[73] The precise legal nature of an Indian band remains unclear. In Whitebear Band Council and Carpenters Provincial Council of Saskatchewan et al. Re,[42] the Saskatchewan Court of Appeal made the following statements:
As municipal councils are “creatures” of the Legislatures of the Provinces, so Indian band councils are the “creatures” of the Parliament of Canada ….
More specifically s. 81 … of the Act clothes Indian band councils with such powers and duties in relation to an Indian reserve and its inhabitants are usually associated with a rural municipality and its council …. Hence a band council exercises—by way of delegation from Parliament—these and other municipal and governmental powers in relation to the reserve ….
…
In summary, an Indian band council is an elected public authority, dependent on Parliament for its existence, powers and responsibilities, whose essential function is to exercise municipal and government power—delegated to it by Parliament—in relation to the Indian reserve ….
[74] The Quebec Court of Appeal in Re Stacey and Montour and the Queen[43] referred to them also as municipalities.
[75] I am reminded, however, of Lamer C.J.’s statement (with which Cory J. agreed) in Canadian Pacific Ltd. v. Matsqui Indian Band:[44]
Although the scheme resembles the kind of tax assessment regime we see at the municipal level of government in Canada, it is more ambitious in what it sets out to achieve. The scheme seeks to provide governmental experience to Aboriginal bands, allowing them to develop the skills which they will need for self-government.
[76] I am of the view that band councils are a sui generis type of subordinate statutory bodies. As such, I fail to see, however, how they could escape the principles of administrative law which govern subordinate statutory bodies.
[77] There is no express provision in paragraph 83(1)(a) of the Act allowing the kind of discrimination which is prohibited under the rules of administrative law. I see no necessary inference which would support the proposition that band councils have, by necessary implication, the power to discriminate between Indians and others in respect of the imposition of taxes. My earlier analysis with regard to section 87 precludes any conclusion to that effect. The spirit of section 87 is contradicted by the very terms of paragraph 83(1)(a).
[78] The appeal procedure, which is required under subsection 83(3) of the Act, is in no way an indication that such inference may be made since it is found commonly in municipal by-laws, and does not neutralize the application of the rule in Montréal (City of) v. Arcade Amusements Inc. et al. and R. v. Sharma. Nor can the Minister, under subsection 83(4), be the guardian of such a fundamental principle of administrative law as the one found in Arcade Amusements and Sharma.
[79] The Little Shuswap Indian Band and The Little Shuswap Indian Band Council have submitted that, before the 1988 amendments, municipalities taxed non-Indian leasehold properties in designated lands in order to raise monies to compensate for the services they provided to the holders of those properties. When the bands began to assume their taxing authority after 1988 in these designated lands,[45] those services, as a general rule, were still provided by the municipality. The bands then sought to ensure the continuity of those services by negotiating contracts with the municipalities in question. Indian bands, on the other hand, provided municipal-like services to their members, and still do.
[80] The Motions Judge severed from the taxation by-laws those provisions which exempt band members and bands from taxation. The effect of his decision, say The Little Shuswap Indian Band and The Little Shuswap Indian Band Council, was to impose, upon band members and bands, taxes for services they do not receive. The only parties enjoying such services are the holders of designated lands. If his ruling is upheld, they say, Indian bands will assess Indian interests, which have no real market value, to pay for municipal services Indians do not receive (or that they provide to themselves or pay for by some other means) so as to be able to tax those who, in fact, receive such services. This, in their view, indicates the ludicrous situation created by the Motions Judge’s ruling. In their oral submissions, they did not deny, on the other hand, that non-Indian property interests may serve to pay for services exclusively enjoyed by the Indian community in the reserve.
[81] We have, on record, no evidence concerning the real market value of Indian interests. Be that as it may, municipalities counter low real estate value with a balanced rate system, not with a taxation exemption based on race or ethnic origin.
[82] The Little Shuswap Indian Band and the Little Shuswap Indian Band Council’s submission is a strong indicator, however, that the by-laws cannot be severed blindly. We were given no indication as to how the rating system applies in the impugned by-laws. These by-laws must, therefore, be thought anew in their entirety. Had the band councils known that parts of the by-laws were invalid, they may have structured them differently.[46]
[83] In conclusion, I find no express provision or implicit delegation by necessary inference which would authorize the discrimination reflected in the appellant’s taxation by-laws. I conclude that these by-laws are invalid because they run contrary to a principle of fundamental freedom which is also a fundamental principle of administrative law. These by-laws are invalid in toto since it cannot be assumed that they would have been adopted had it been known that certain portions of them were invalid.
[84] I would dismiss these appeals with costs provided, however, that only one set of costs be awarded for the hearing.
The following are the reasons for judgment rendered in English by
Robertson J.A. (dissenting):
I. INTRODUCTION
[85] Section 83 of the Indian Act seeks to promote native self-government by authorizing band councils to enact taxation by-laws and issue property assessment notices in respect of land “in the reserve”. These appeals stem from notices of assessment issued to the respondents, Canadian Pacific and Unitel Communications, under by-laws enacted by the appellant band councils. Canadian Pacific holds title to several rights-of-way traversing the appellants’ reserves, all of which are situated in British Columbia. Unitel is drawn into the legal controversy because its fibre-optic cables are buried under the right-of-way crossing the Matsqui reserve. In response to the notices of assessment, judicial review was sought on the ground that both the notices and taxation by-laws are invalid. With respect to the validity of the notices, the respondents maintain that Canadian Pacific acquired “fee simple” title to each right-of-way and, therefore, the lands are not “in the reserve”. With respect to the taxation by-laws, the respondents argue invalidity on the ground of unauthorized discrimination. The spectre of discrimination arises because all of the impugned by-laws provide that only the property interests of non-Indians on reserve lands are subject to taxation.
[86] The Motions Judge held that the lands in issue were not “in the reserve”, as Canadian Pacific had obtained a “fee simple determinable” to each right-of-way. He also held that the tax exemption accorded reserve lands occupied by band members amounted to unauthorized discrimination. Accordingly, the judicial review applications were allowed. The five appellants seek to have those orders set aside.
[87] In the reasons that follow, I respectfully conclude that Canadian Pacific could not have validly acquired fee simple title to the rights-of-way. At best, it acquired a statutory easement or licence. Consequently, the lands in question are “in the reserve”, as that term is defined by the Indian Act and, therefore, the notices of assessment are valid. I am also of the respectful view that the by-laws are not ultra vires on the ground of unauthorized discrimination and, therefore, they are valid. Thus, the appeals must be allowed.
[88] Though the issues and my conclusions are facile to state, I do not wish to minimize the importance of these appeals in so far as they raise fundamental and difficult questions about the nature of statutory protection for reserve lands. Equally important are the concept of native self-government, which section 83 of the Indian Act seeks to promote through the aegis of taxation by-laws,[47] and the historic reasons which warrant an exception to the common law rule prohibiting the enactment of discriminatory by-laws. Absent that historical framework, it would be unjust for this Court to sanction a quasi-legislative scheme in which only non-Indians are subject to taxation on reserve lands.
[89] Finally, it must be acknowledged that the success of these appeals turns on the interpretation of a statute of great historical and political significance, namely, An Act respecting the Canadian Pacific Railway Act of 1881 (the CPR Act).[48] On the basis of that legislation, Canadian Pacific seeks to repudiate the appellants’ principal legal argument; namely, that the Crown lacked the authority under both the Railway Act and the Indian Act to grant Canadian Pacific fee simple title to each of the rights-of-way, irrespective of what the conveyancing documents purport to convey. Canadian Pacific asserts that the CPR Act supercedes both pieces of legislation so as to effectively extinguish Aboriginal title with respect to the rights-of-way traversing reserve lands.
II. THE LITIGATION
[90] In total, eight judicial review applications were initiated in the Federal Court, challenging the notices of assessment issued under by-laws adopted in accordance with the requirements of the Indian Act.[49] Six applications were heard by the Motions Judge. Following the release of his decision, the parties to the two remaining applications sought and obtained consent judgments in conformity with his ruling. Subsequently, all eight decisions were appealed to this Court. One appeal was abandoned. Two others were consolidated and decided by another panel of this Court in 1998.[50] However, in each of those appeals, the Canadian National Railway was the respondent, not Canadian Pacific. Other factual and substantive differences between the cases currently under appeal and the two decided in 1998 include the fact that the earlier appeals focussed on: (1) whether there had been a surrender by the Indian bands in question; (2) the applicability of section 35 of the Indian Act, or what is commonly referred to as the “taking” or “expropriation” provision; and (3) the wording of the relevant conveyancing documents. Because of these differences and because Canadian Pacific is relying on the CPR Act to establish fee simple title to its rights-of-way, it is common ground that the earlier appeals do not impact directly on those presently before us.
[91] Although Canadian Pacific was granted leave to submit one memorandum in respect of all five appeals, no order for consolidation was sought, presumably because of factual differences. Nevertheless, unless otherwise noted, I have assumed factual uniformity. This approach was adopted by counsel in the four days of oral argument before this Court. The submissions of the interveners focussed solely on the issue of discrimination because of its potential impact on Aboriginal self-government, which is important to all Indian bands and not just those whose taxation by-laws are currently under review.
III. THE DECISION BELOW
[92] This is one instance where little is gained by analyzing the reasons for judgment rendered below.[51] I say this for two reasons. First, much of what was decided below is applicable only to the rights-of-ways occupied by Canadian National. That entity is not a party to the present appeals. Second, the issues before us are strikingly different than those advanced before the Motions Judge. Once Canadian Pacific invoked the provisions of the CPR Act as the basis for acquiring fee simple title to its rights-of-way, much of the Motions Judge’s analysis became irrelevant. However, the finding that each of the letters patent issued to Canadian Pacific conveyed a fee simple determinable cannot be ignored and is, in my respectful view, in error.
IV. ISSUES
[93] All parties agree that there are two principal issues to be resolved: (1) whether the lands com- prising the rights-of-way are “in the reserve” within the meaning of section 83 of the Indian Act ; and (2) if so, whether the tax exemption accorded band members constitutes unauthorized discrimination, rendering each of the taxation by-laws invalid. The former issue requires an examination of such fundamental questions as: (1) the definition of reserve lands under the Indian Act; (2) the intention of Parliament in conveying railway lands to Canadian Pacific; and, most significantly; (3) whether the Crown had the requisite authority to convey fee simple title to Canadian Pacific. In essence, this Court is being called upon to determine the precise nature of the title conveyed through the intersection of the Railway Act, the Indian Act and the CPR Act.
V. ANALYSIS
A. Are the rights-of-way “in the reserve”?
(1) The definition of “reserve”
[94] Paragraph 83(1)(a) of the Indian Act sets out the requirement that only lands within a reserve are subject to taxation by band councils. The definition of “reserve” is found in subsection 2(1). The relevant portions of both sections read as follows:
2. (1) …
“designated lands” means a tract of land or any interest therein the legal title to which remains vested in Her Majesty and in which the band for whose use and benefit it was set apart as a reserve has, otherwise than absolutely, released or surrendered its rights or interests, whether before or after the coming into force of this definition;
“reserve”
(a) means a tract of land, the legal title to which is vested in Her Majesty, that has been set apart by Her Majesty for the use and benefit of a band, and
(b) except in subsection 18(2), sections 20 to 25, 28, 36 to 38, 42, 44, 46, 48 to 51, 58 to 60 and the regulations made under any of those provisions, includes designated lands;
83. (1) Without prejudice to the powers conferred by section 81, the council of a band may, subject to the approval of the Minister, make by-laws for any or all of the following purposes, namely,
(a) subject to subsections (2) and (3), taxation for local purposes of land, or interests in land, in the reserve, including rights to occupy, possess or use land in the reserve; [Emphasis added.]
[95] Based on the above definition of reserve lands, including “designated lands”, the appellants argue that since the Crown did not convey “absolute” title to the rights-of-way to Canadian Pacific, those lands are “in the reserve”. The appellants rely on the Motions Judge’s finding that Canadian Pacific received only a fee simple determinable to each right-of-way to support the proposition that it did not acquire absolute title. Admittedly, a fee simple determinable is less than a fee simple absolute. Therefore, it is argued that all of the rights-of-way are “in the reserve”. I cannot accept this submission for two reasons. First, the conveyancing documents in question were properly drafted to convey fee simple title to the rights-of-way, not a fee simple determinable. Second, the term “otherwise than absolutely” in the definition of “designated lands” applies only where there has been a surrender of reserve lands. The present appeals do not involve a surrender of Indian lands and, therefore, what is relevant is the requirement that the Crown retain legal title for lands to be “in the reserve”. I turn first to the Motions Judge’s finding that Canadian Pacific received a fee simple determinable estate in the disputed rights-of-way.
(a) Fee simple vs. fee simple determinable
[96] There are 15 rights-of-way in issue and, therefore, 15 conveyances which need to be examined to determine whether fee simple title passed to Canadian Pacific or a determinable fee as found by the Motions Judge. At the same time, no one objected to the fact that not all of the conveyances were placed in evidence before this Court. Nevertheless, it is evident that the documents so placed utilize the language necessary at common law to create title in fee simple. The “words of limitation” and the “habendum” used, for example, in the letters patent in respect of the Matsqui right-of-way reveal clearly a conveyance of title in fee simple:
[w]e by these Presents do grant sell alien convey and assure unto the said The Canadian Pacific Railway Company their successors and assigns for ever all that parcel or tract of land situate lying and being in the Matsqui (Sahhahcom) Indian Reserve ….
TO HAVE AND TO HOLD the said parcel or tract of land hereby granted conveyed and assured unto the said The Canadian Pacific Railway Company their successor and assign for ever ….
[97] Accepting that all of the conveyancing documents are substantively similar to the Matsqui grant, then it is necessary to examine the legal basis on which the Motions Judge ruled that all of the conveyances amounted to a fee simple determinable. If the Motions Judge were correct that Canadian Pacific acquired only a fee simple determinable to each right-of-way, then I would have to consider whether the lands were outside the reserves. That is an issue which I wish to avoid. Above all, I wish to dispel several misconceptions which are beginning to take root in the jurisprudence as to what constitutes a fee simple determinable. It is apparent that the Motions Judge is of the view that a fee simple determinable results from the inclusion, for example, of a recital that lands were granted “for railway purposes”. At one point, he stated:[52]
I am satisfied that there is a common theme that runs through the letters patent, the orders in council and the applicable legislation; and, that theme is the applicants were granted the lands specifically for railway purposes. Therefore, I am satisfied that the interest in the lands granted to the railways was a determinable fee. Consequently, title vests with the applicants and the lands do not fall within the Indian bands’ taxing authority. [Emphasis added.]
[98] He continued, holding:[53]
I am satisfied that if the terminating event is integral to the size of the interest, then a determinable fee is created. On the other hand, if the terminating event is not integral to that size, then a conditional interest is created. In the instant case the terminating event, i.e., the impugned lands ceasing to be used for railway purposes, is integral to the size of the interest. Phrases such as “for the purposes of a railway” used by the letters patent and contained in the legislation are more in the line of the magic words that create a determinable fee than they are in line with creating a conditional interest.
[99] In my respectful view, this understanding of the nature of a fee simple determinable estate is clearly wrong. A fee simple determinable does not arise simply because a conveyancing document includes a recital as to the purpose of the grant, e.g., for railway purposes, as held by the Motions Judge. A property conveyancer would appreciate why such a recital is placed in a conveyancing document. Under the Railway Act, the Crown may only convey to railway companies such lands as are necessary for railway purposes.[54] Without a recital to that effect, the abstracter would be put on constructive notice that the conveyance of Crown lands may be in contravention of the Railway Act.
[100] It is important to recognize that a fee simple determinable is created by qualifying the words of limitation used in creating an estate in fee simple. For example, a fee simple determinable might provide that lands are granted to the grantee and its successors and assigns “for so long as the lands are used for railway purposes”.[55] As I understand the facts, similar wording was used in the conveyances to Canadian National, which were in issue in the earlier appeals to this Court and, therefore, the finding that what this railway received was a fee simple determinable to its right-of-ways accords with the law. However, this line of analysis has no application to the present appeals.
[101] In conclusion, the conveyancing documents received by Canadian Pacific and presented to this Court purport to convey fee simple title to each right-of-way, not a determinable fee. It remains to be decided whether the Crown had the authority to convey title in fee simple, notwithstanding the provisions of the Indian Act and the Railway Act. Before considering this issue, however, I wish to point out that the term “otherwise than absolutely” in the definition of “designated lands” is irrelevant to the disposition of these appeals. What is relevant is whether legal title to reserve lands remains vested in Her Majesty.
b) “Designated lands”
[102] The term “designated lands” was added to the Indian Act in 1988[56] in order to reverse the finding in Re Leonard and the Queen in right of British Columbia[57] (hereinafter the Leonard decision) that reserve lands surrendered solely for the purpose of leasing no longer constitute lands within a reserve for taxation purposes. In St. Mary’s Indian Band,[58] the Supreme Court described these amendments in the following terms:
It is obvious, however, that Parliament did not draw all lands surrendered by an Indian band within the legal definition of “reserve”. Had this been the desired end, the means would have been decidedly less elaborate. Instead, recognizing the need to keep land surrendered for sale outside the definition of “reserve”, Parliament created a two-tiered system of surrenders . That surrenders for sale were meant to remain beyond the definition of reserve is evidenced by the precondition in s. 37(1) that land be surrendered absolutely prior to being sold. That surrenders for lease were meant to be drawn within the definition of “designated lands” is evidenced by a number of features of the Kamloops Amendments, the most obvious being the fact that s. 38(2) uses the word “designate”.
Why did Parliament use this broad “otherwise than absolutely” language? If its express intention was to keep surrenders for sale outside the reserve, why did Parliament not define “designated lands” in a more explicit manner? I offer one convincing response: Parliament must have selected the broad “otherwise than absolutely” phraseology in order to account for other contingencies” to allow, at one end, for other limited forms of surrenders, such as a right of way, to be considered designated land, and to ensure, at the other end, that other forms of permanent surrenders such as exchange or gift remain beyond our notions of reserve land . Parliament could have tailored its definition of “designated lands” to the specific distinction between lease and sale. [Emphasis added.]
[103] Accordingly, the Kamloops Amendments ensure that if reserve lands are surrendered “otherwise than absolutely”, as when lands are surrendered for the purpose of leasing, such lands remain “in the reserve” within the meaning of section 83. In short, the term “otherwise than absolutely” applies to cases involving a surrender of reserve lands. This is not one of those cases. However, my disagreement on this point is not fatal to the appellants’ case.
[104] What is relevant to these appeals is that for lands to be within a reserve, “legal title” must be “vested in Her Majesty”. That requirement is set out in the opening words of paragraph 2(1)(a) and again in the definition of “designated lands”. I pause here to emphasize that in my respectful opinion, and contrary to what was decided in the Leonard case, a surrender for purposes of leasing does not divest the grantor of legal title to lands. Legal title, however, is divested if there is a conveyance in fee simple. Thus, if Canadian Pacific validly acquired fee simple title to the right-of-ways from the Crown, the notices of assessment are invalid. Conversely, if Canadian Pacific is entitled only to a lesser interest in land, such as an easement, regardless of what the conveyancing documents purport to convey, the lands in question are “in the reserve” and, therefore, the assessments are valid. This is so because a conveyance amounting to an easement or a licence does not divest the grantor (e.g., the Crown) of legal title.[59]
[105] Two principal submissions were pursued before this Court. The first was advanced by the appellant Matsqui, which argued that the documents preceding the issuance of letters patent demonstrate that the Crown did not intend to grant Canadian Pacific fee simple title to the right-of-ways. The second submission, advanced by all five appellants, was that the Crown did not have the authority to convey fee simple title to the right-of-ways because of restrictive provisions found in the Railway Act and the Indian Act. Canadian Pacific maintains that the requisite authority stems from the CPR Act. If so, that Act has the effect of extinguishing Indian title to reserve lands granted for railway purposes. I hasten to add that when I speak of Indian title to reserve lands, I am simply referring to the legal title held by the Crown for the benefit of the Indians. I shall deal first with the submission advanced by Matsqui.
(2) The Matsqui reserve—Was there an intention to convey fee simple title?
[106] Canadian Pacific owns one right-of-way crossing the Matsqui reserve. Matsqui seizes upon the fact that the term “right-of-way” has two meanings. As a term of art, its meaning is restricted to an interest in real property which falls within the broad category of easements. When used in its colloquial sense, however, the term simply connotes access to a particular parcel of property, without conveying the precise legal character of the owner’s title. Matsqui maintains that the documents relating to the issuance of the letters patent, properly constructed, reveal that Canadian Pacific obtained only an easement. This argument is premised on the following facts.
[107] In 1890, lawyers for Canadian Pacific wrote to the Superintendent of Indian Affairs with a view to purchasing a right-of-way across the Matsqui reserve for $120. The responsible Minister recommended “acceptance of the offer and for a sale of the land as a right of way”. Order in Council No. 1653, dated July 21, 1891, which authorized the conveyance, states that Canadian Pacific applied for a right-of-way through the Indian reserve at Matsqui, that the land required for that purpose consisted of 2.47 acres, and that Canadian Pacific was prepared to pay $120. At the same time, Matsqui concedes that the letters patent issued on August 25, 1891 to Canadian Pacific evidences a conveyance of fee simple title.
[108] However, Matsqui contends that the letters patent do not unambiguously provide for fee simple title when construed together with the authorizing Order in Council. Therefore, it submits that Canadian Pacific’s interest in the right-of-way is subject to the rule that Crown grants should be construed strictly in favour of the Crown and in a manner consistent with the “honour of the Crown”,[60] in order to ensure that the interests of Canada’s Aboriginal peoples are adequately protected. Thus, in its view, Canadian Pacific obtained no more than an easement. In my respectful opinion, this argument cannot succeed.
[109] If there is any ambiguity, it is contained in the documents giving rise to the sale transaction, specifically, the Order in Council. Admittedly, it is unclear whether the term “right-of-way” was being used as a term of art or not. However, that ambiguity was resolved by the letters patent which clearly indicates conveyance of title in fee simple. Surely, Canadian Pacific is entitled to rely on a formal document of conveyance which admits of no ambiguity. In effect, Matsqui is seeking rectification of a document when it has not yet demonstrated that the Crown mistakenly conveyed fee simple title. Had there been an error on the part of the Crown, the equitable remedy of rectification might have been available. But it is certainly not open to Matsqui to ask this Court to rewrite a conveyance to which Matsqui was not a party. In this regard, the Supreme Court’s decision in St. Mary’s Indian Band, supra, is of no assistance to Matsqui.
[110] In St. Mary’s Indian Band, the issue was whether the band council had made an absolute surrender of reserve lands for use as a municipal airport, rendering them beyond the reach of the band’s taxation by-law. In spite of its conclusion that the band intended to surrender the lands absolutely, the Supreme Court held that, given the sui generis nature of the Indian interest in reserve lands, the Court should not apply technical common law rules governing real property to frustrate the interests of Aboriginal peoples.[61] Matsqui relied heavily on this principle in the case at bar, asserting that the conveyancing documents should be given a liberal interpretation favouring the preservation of its interest in the reserve lands. However, it is significant that the Indian band in St. Mary’s Indian Band was challenging a conveyance made under the surrender provisions, to which it was a necessary party. That is not the situation at bar.
[111] Nonetheless, assuming that the Crown intended to convey, and did in fact convey, fee simple title to the right-of-way, it remains to be decided whether the Crown had the requisite authority to convey such title to Canadian Pacific.
(3) Did the Crown have the authority to convey fee simple title?
[112] The thrust of the appellants’ argument is that the government lacked the authority to convey fee simple title to the rights-of-way under the Indian Act and the Railway Act in force at the time of each conveyance. At best, they claim, Canadian Pacific was entitled to a statutory easement.
[113] At issue in these appeals are 15 distinct rights-of-way running through the appellants’ reserves. We were informed that all of the relevant reserves were created in either 1878 or 1879. The first right-of-way was conveyed by letters patent in 1891; the last, in 1968. The remaining 13 rights-of-way were conveyed between 1911 and 1935.
[114] Despite the appellants’ insistence that the relevant legislation be examined as of the date the rights-of-way were conveyed to Canadian Pacific, it is helpful to begin with the relevant provisions of the Indian Act and Railway Act in force at the time the CPR Act of 1881 was enacted. Although both Acts have undergone frequent revisions, the following analysis attempts to simplify matters. I turn first to a preliminary consideration.
(a) Does the federal Crown own the underlying fee?
[115] Both the appellants and respondents discouraged this Court from delving into the issue of whether the underlying title to reserve lands lies with the Crown in right of Canada or the province of British Columbia. The parties agree that the underlying title is with the former. Therefore, if the CPR Act, the Railway Act and the Indian Act interact to authorize the conveyance of fee simple title to the rights-of-way, those conveyances are valid against the Crown in right of the province of British Columbia. While I am willing to accept that the reversionary interest in reserve lands in British Columbia lies with the federal Crown for the purposes of this appeal, I doubt that such a concession could have been made between 1871 and 1938.
[116] The earliest date at which British Columbia could be said to have abandoned its reversionary right to reserve lands was 1912, when the McKenna-McBride Agreement was adopted.[62] The more likely date is 1938, when B.C. Order in Council 1036/1938 purported to transfer title in the province’s Indian reserves to Ottawa.[63] Nevertheless, I accept the parties’ concession in the context in which it was made. Presumably, conveyances to Canadian Pacific of fee simple title to reserve lands prior to the date British Columbia relinquished its reversionary rights are effective under the antiquated doctrines of “after-acquired property” and “feeding the estoppel”.[64] This is assuming, of course, that conveyances in fee simple were authorized under the CPR Act, as alleged by Canadian Pacific, an issue which will be addressed below.
(b) The general framework: The Indian Act and the Railway Act
[117] The Indian Act in force when the CPR Act was adopted was The Indian Act, 1880.[65] Section 36 of that Act provides:
36. No reserve or a portion of a reserve shall be sold, alienated or leased until it has been released or surrendered to the Crown ….
This restriction on the disposition of reserve lands has been retained in section 37 [as am. by R.S.C., 1985 (4th Supp.), c. 17, s. 2] of the current Act.[66]
[118] Section 31 of The Indian Act, 1880 is also relevant. It provides, inter alia, that if any railway passes through a reserve “belonging to … any band of Indians”, compensation must be paid by the railway company to the Receiver General for the use of the “band of Indians for whose benefit the reserve is held”. This section eventually became section 35 of the current Indian Act,[67] and is commonly referred to as the “taking” or “expropriation” provision. Section 31 of The Indian Act, 1880 does not stipulate the precise nature of the legal title that a railway company could obtain under that provision, nor does it require the consent of the Governor in Council. The latter requirement was first imposed under an 1887 amendment to the Indian Act.[68]
[119] The 1887 amendment to the Indian Act prohibited the taking of reserve lands for railway or public purposes without the consent of the Governor in Council. The obligation to pay compensation remained intact. For present purposes, the only other significant amendment to section 35 [then section 46] occurred in 1911, when the taking of reserve lands for public and railway purposes was permitted, subject to the following conditions: (1) the consent of the Governor in Council had to be obtained; (2) compensation had to be paid; and (3) the expropriating entity had to be empowered under its enabling legislation to take lands or an interest in lands without the consent of the owner. The 1911 amendment reads:[69]
46. No portion of any reserve shall be taken for the purpose of any railway, road, public work, or work designed for any public utility without the consent of the Governor in Council, but any company or municipal or local authority having statutory power, either Dominion or provincial, for taking or using lands or any interest in land without the consent of the owner may, with the consent of the Governor in Council as aforesaid, and subject to the terms and conditions imposed by such consent, exercise such statutory power with respect to any reserve or portion of a reserve; and in any such case compensation shall be made therefor to the Indians of the band, and the exercise of such power, and the taking of the lands or interest therein and the determination and payment of the compensation shall, unless otherwise provided by the order in council evidencing the consent of the Governor in Council, be governed by the requirements applicable to the like proceedings by such company, municipal or local authority in ordinary cases. [Emphasis added.]
[120] Four significant facts must be noted at this juncture. First, with respect to the condition precedent that the taking authority have statutory authority to expropriate lands without the consent of the owner, such power was expressly granted to railway companies, including Canadian Pacific, no later than 1888.[70]
[121] Second, the taking power in the amended expropriation provision does not necessarily result in the grantee obtaining fee simple title (see discussion, infra). Indeed, the Governor in Council could impose terms and conditions when consenting to such a taking which, presumably, would have extended to defining the estate to be conveyed. Furthermore, when reserve lands are expropriated under this provision, the Governor in Council arguably owes a fiduciary duty to the affected Indians to act in, or at least consider, their best interests.[71]
[122] Third, it is clear from the 1911 amendment that a taking under the expropriation provision had to be accomplished using the general procedure established by the taking entity’s empowering legislation. In this regard, it is relevant to note that when the Railway Act was amended in 1888,[72] restrictions similar to those in the taking provisions of the Indian Act were imposed on the power of railway companies to take lands vested in Her Majesty, including reserve lands. Specifically, section 99 provides that no lands vested in Her Majesty could be taken without the consent of the Governor in Council, and that the Governor in Council’s consent could be conditional on prescribed terms. Section 101 provides that reserve lands could not be taken, used or occupied without the consent of the Governor in Council and, where such consent is given, compensation shall be paid to the affected Indians.
[123] If sections 99 and 101 of The Railway Act are examined alongside the 1911 amendment to section 35 of the Indian Act, it is abundantly clear that the expropriation schemes created by the two statutes are substantively similar and operate concurrently. The Indian Act authorizes the expropriation of reserve lands by a railway company for railway purposes, subject to the consent of the Governor in Council and the payment of compensation. The expropriation process and the amount of compensation required is, in turn, determined by reference to the Railway Act.
[124] Finally, the power to take reserve lands for public purposes has been retained under the current version of the Indian Act.[73]
[125] Ignoring the provisions of the Railway Act for the moment, there are only two principal ways that title to reserve lands can be acquired under the Indian Act.[74] First, title may be acquired by means of a valid surrender of the lands to the Crown by an Indian band. The second involves the taking or expropriation provision of the Indian Act. For Canadian Pacific, both of these options must be examined in light of a restriction found within the Railway Act which effectively prohibits railway companies from acquiring fee simple title to Crown lands.
[126] Subsection 7(3) of The Consolidated Railway Act, 1879[75] provides that no railway company can take or use lands vested in Her Majesty without the consent of the Governor in Council and that lands so acquired cannot be alienated. That provision reads as follows:
7. …
3. No railway company shall take possession of, use or occupy any lands vested in Her Majesty, without the consent of the Governor in Council; but with such consent any such company may take and appropriate for the use of their railway and works, but not alienate, so much of the wild lands of the Crown lying on the route of the railway, as have not been granted or sold, and as may be necessary for such railway, and also so much of the public beach, or of the land covered with the waters of any lake, river, stream or canal, or of their respective beds, as is necessary for making and completing and using their said railway and works, …. [Emphasis added.]
[127] It is trite law than an absolute restriction on alienation is antithetical to the notion of title in fee simple.[76] For that reason, any conveyance from the Crown to a railway company cannot be a fee simple, let alone a fee simple determinable. Admittedly, subsection 7(3) may be rendered inapplicable by the adoption of a “Special Act”. This possibility is set out in subsection 2(2) and section 3 of The Consolidated Railway Act, 1879, the relevant portions of which read as follows:
2. …
2. The said sections [five to thirty four, inclusive] shall also apply to every railway constructed or to be constructed under the authority of any Act passed by the Parliament of Canada, and shall, so far as they are applicable to the undertaking, and unless they are expressly varied or excepted by the Special Act, be incorporated with the Special Act, form part thereof, and be construed therewith as forming one Act.
3. For the purpose of excepting from incorporation with the Special Act any of the sections forming Part First of this Act, it shall be sufficient in the Special Act to enact, that the sections of this Act proposed to be excepted, referring to them by the words forming the headings of such sections respectively, shall not be incorporated with such Act, and the Special Act shall thereupon be construed accordingly. [Emphasis added.]
[128] Accordingly, it is clear that in order to be exempt from the application of subsection 7(3) of The Consolidated Railway Act, 1879, two requirements must be met: (1) a “Special Act” must be enacted; and (2) there must be an express provision in that legislation identifying which provisions of the Railway Act are to be overridden. In the absence of these preconditions, the Crown cannot convey, and railway companies cannot acquire, fee simple title to Crown lands, including reserve lands, since the alienation of such lands is prohibited under the Railway Act. A conveyance which purports to do otherwise is ineffectual. According to the ultra vires doctrine, the Crown cannot grant a greater estate than that prescribed by the governing statute, irrespective of what the orders in council and letters patent purport to convey.[77]
[129] It is significant that the restriction on alienation, the compensation requirement when reserve lands are taken, and the accompanying preconditions to overriding these restrictions were retained in the Railway Act until its repeal in 1996.[78] Indeed, the restriction on alienation has been preserved in the successor to the Railway Act, the Canada Transportation Act. Subsection 96(1) of that Act reads:
96. (1) Where a railway company took possession of, used or occupied land under section 134 of the Railway Act before the coming into force of section 185, the railway company may not alienate the land except to transfer it to a railway company for the purpose of continuing railway operations or to the Crown. [Emphasis added.]
[130] While there is jurisprudence which supports the understanding that, as of 1911, fee simple title could be obtained under section 35 of the Indian Act,[79] such cases did not involve the taking of reserve lands by a railway company. Thus, the question remains whether, in light of the restrictions imposed by the Railway Act, Canadian Pacific could acquire fee simple title to reserve lands under section 35 of the Indian Act following the 1911 amendments (provided the Governor in Council did not impose terms effectively transferring a lesser estate). In other words, does the 1911 amendment override the provisions of the Railway Act? In light of the statutory requirements for exempting a railway company from the restrictions set out in the Railway Act, it is difficult to argue that section 35 of the Indian Act has such an effect. In any event, this issue need not be decided here as it is common ground that none of the conveyances in question were made pursuant to section 35 of the Indian Act. (Quaere whether the 1968 Cook’s Ferry grant was made under section 35?)
[131] In summary, at all relevant times, Canadian Pacific could not have validly obtained fee simple title to the reserve lands in question under the Railway Act because of the prohibition against alienation of lands acquired from the Crown for railway purposes. At best, Canadian Pacific obtained statutory easements to the rights-of-way or licences to use or occupy reserve lands required for railway purposes. For this reason, it is necessary to determine whether the provisions of the CPR Act of 1881 override those outlined in the Railway Act.
(c) The impact of An Act respecting the Canadian Pacific Railway[80]
[132] This part of my analysis requires a basic appreciation of the well-known historical events leading up to the passage of the CPR Act and its constituent parts. Under the British Columbia Terms of Union (1871),[81] the Dominion government was obligated to complete a railway linking British Columbia with the rest of Canada within 10 years. Nine years later, the dream of a railway linking east and west remained unfulfilled. Knowing that it could not live up to its ambitious policy and its legal obligations to British Columbia without the assistance of the private sector, the Dominion government struck a deal with the promoters of what was to become Canadian Pacific. The contract was potentially lucrative, but it involved significant financial risks. (In 1884, Canadian Pacific returned to Parliament for a $30 million loan.) The terms of the agreement were approved in 1880 and ratified by the CPR Act in 1881. That Act consists only of a preamble and six sections, with the contract attached as a schedule comprising a further 22 articles. Another schedule is attached to that schedule, outlining the powers to be exercised by the company to be incorporated by the promoters, namely, Canadian Pacific.
[133] Canadian Pacific’s position is straightforward: the Crown was authorized to convey fee simple title to the rights-of-way to Canadian Pacific, and did in fact convey such title in accordance with the CPR Act. Canadian Pacific also maintains that Parliament agreed to extinguish “Indian title” to the railway lands. Specifically, section 5 of the CPR Act and article 7 of the contract state that, once the railway was completed, the government was bound to convey it to Canadian Pacific in its entirety, at which time the railway would become the “absolute property” of Canadian Pacific. Article 12 imposes an obligation on the government to extinguish “Indian title” to lands “herein appropriated and to be hereafter granted in aid of the railway”. Although there are only slight differences in the wording of section 5 of the Act and section 7 of the contract, it is helpful to reproduce both:
5. Pending the completion of the eastern and central sections of the said railway as described in the said contract, the Government may also transfer to the said Company the possession and right to work and run the several portions of the Canadian Pacific Railway as described in the said Act thirty-seventh Victoria, chapter fourteen, which are already constructed, and as the same shall be hereafter completed; and upon the completion of the said eastern and central sections the Government may convey to the Company, with a suitable number of station buildings … those portions of the Canadian Pacific Railway constructed, or agreed by the said contract to be constructed by the Government, which shall then be completed; and upon completion of the remainder of the portion of the said railway to be constructed by the Government, that portion also may be conveyed by the Government to the Company, and the Canadian Pacific Railway defined as aforesaid shall become and be thereafter the absolute property of the Company; the whole, however, upon the terms and conditions, and subject to the restrictions and limitations contained in the said contract.
…
7. The railway constructed under the terms hereof shall be the property of the Company: and pending the completion of the Eastern and Central sections, the Government shall transfer to the Company the possession and right to work and run the several portions of the Canadian Pacific Railway already constructed or as the same shall be completed. And upon the completion of the Eastern and Central sections, the Government shall convey to the Company, with a suitable number of station buildings … those portions of the Canadian Pacific Railway constructed or to be constructed by the Government which shall then be completed; and upon completion of the remainder of the portion of railway to be constructed by the Government, that portion shall also be conveyed to the Company; and the Canadian Pacific Railway shall become and be thereafter the absolute property of the Company. And the Company shall thereafter and forever efficiently maintain, work and run the Canadian Pacific Railway. [Emphasis added.]
[134] Before dealing with the substance of Canadian Pacific’s position, one preliminary matter must be addressed. There is some question as to whether all 15 conveyances were made pursuant to the CPR Act, since some do not expressly state that they were so issued. Counsel for Canadian Pacific, Mr. Gouge, kindly slotted each of the letters patent into one of three categories. There are eight type “A” conveyances, which specifically invoke section 5 of the CPR Act and article 7 of the contract as authority for the conveyances. The six type “B” conveyances recall an agreement between Canada and Canadian Pacific “for the absolute purchase” of the lands, but do not identify any statutory authority for the conveyances. Finally, the 1968 Cook’s Ferry conveyance states that it was made pursuant to the Indian Act.
[135] The appellants did not contest Canadian Pacific’s position that the type “A” and type “B” conveyances were made pursuant to the CPR Act. As for the remaining conveyance, Canadian Pacific asked that we infer that it was made pursuant to that legislation, rather than the Indian Act. To the best of my recollection, the appellants did not contest this point, preferring to deal with Canadian Pacific’s main argument. While I am prepared to accept these concessions for the purpose of these appeals, I wish to note that they do not explain why Canadian Pacific paid for its rights-of-way when no monetary compensation was required under the contract. A further explanation of the agreement between the government and Canadian Pacific is required.
[136] Under the terms of the contract, the Dominion government agreed to build, and ultimately convey to Canadian Pacific, the western segment of the railway which stretched from Kamloops to Port Moody. In return, Canadian Pacific agreed to complete the construction of two other railway segments on which the government had earlier commenced construction, namely, the eastern segment (from Lake Nipissing to Selkirk) and the central segment (from Selkirk to Kamloops). Once these two segments were completed, the government agreed to convey them to Canadian Pacific as well. There was no obligation on the part of Canadian Pacific to provide monetary consideration for those conveyances. Nevertheless, all of the letters patent or Crown grants in issue refer to a sale at a fixed price. While Mr. Gouge wished to provide an explanation for this apparent contradiction, counsel in the court below had failed to lead any evidence on this point. To facilitate matters, counsel for the appellants allowed Mr. Gouge to explain. Briefly stated, it appears that Canadian Pacific and the Crown could not agree on the exact amount of land to be conveyed and, as a result, Canadian Pacific agreed to provide monetary compensation.
[137] While I am not entirely satisfied with this explanation, I am prepared to accept that all of the disputed conveyances were made pursuant to the CPR Act for the purpose of deciding these appeals. I do so because it is common ground that all of the rights-of-way in issue are located in the western segment of the railway, and because the CPR Act obligated the Crown to transfer the completed railway to Canadian Pacific as its “absolute property”. Accordingly, even if the government and Canadian Pacific were mistaken as to the true legal basis on which letters patent could issue, the fact remains that Canadian Pacific was entitled to conveyances under the CPR Act. However, the nature of the interest that the government was authorized to convey under that Act is another matter.
[138] Canadian Pacific argues that the provisions of the CPR Act and the contract clearly displace those of the Indian Act and the Railway Act, thereby authorizing a grant of fee simple and extinguishing the Indians’ interest in the rights-of-way. It bases this conclusion on three arguments: first, it claims that article 22 of the contract precludes the application of subsection 7(3) of The Consolidated Railway Act, 1879, which restricts the alienation of Crown lands acquired for railway purposes; second, it claims that the contract stipulated that Canadian Pacific was to receive “absolute property” to the railway lands crossing the appellants’ reserves, effectively extinguishing Indian title to those lands; and third, it claims that article 12 of the contract expressly required the government to extinguish Indian title to the railway lands in issue. I propose to address each of these three arguments in turn, beginning with the interaction between article 22 of the contract and subsection 7(3) of The Consolidated Railway Act, 1879.
(i) Article 22 of the contract and subsection 7(3) of The Consolidated Railway Act, 1879
[139] Canadian Pacific notes that article 22 of the contract provides that the provisions of The Consolidated Railway Act, 1879 only apply to Canadian Pacific in so far as they are not inconsistent with the CPR Act and the contract. Thus, Canadian Pacific maintains that the restraint on alienation imposed under The Consolidated Railway Act, 1879 does not apply to Canadian Pacific, since that restriction is inconsistent with the “absolute title” provided for under the CPR Act and the contract. Article 22 of the contract states:
22. The Railway Act of 1879, in so far as the provisions of the same are applicable to the undertaking referred to in this contract, and in so far as they are not inconsistent herewith or inconsistent with or contrary to the provisions of the Act of incorporation to be granted to the Company, shall apply to the Canadian Pacific Railway. [Emphasis added.]
[140] The difficulty I have with Canadian Pacific’s argument concerns the legal effect of article 22 of the contract. There is no doubt that the CPR Act was intended to override inconsistent provisions of The Consolidated Railway Act, 1879. Indeed, Schedule A to the contract, which sets out the powers of the railway company to be incorporated for the purpose of constructing the railway, provides for this in section 17, which states:
17. “The Consolidated Railway Act, 1879,” in so far as the provisions of the same are applicable to the undertaking authorized by this charter, and in so far as they are not inconsistent with or contrary to the provisions hereof, and save and except as hereinafter provided, is hereby incorporated herewith.
[141] But it is equally true that section 3 of The Consolidated Railway Act, 1879 (and its successors) stipulates that any overriding legislation, that is, any “Special Act”, must identify which provisions of The Consolidated Railway Act, 1879 are being displaced. This explains the presence of section 18 in Schedule A to the contract, which expressly details those provisions of The Consolidated Railway Act, 1879, that are being overridden or modified. Section 18 in Schedule A reads:
18. As respects the said railway, the seventh section of “The Consolidated Railway Act, 1879” relating to Powers , and the eighth section thereof relating to Plans and Surveys, shall be subject to the following provisions:—
a. The Company shall have the right to take, use and hold the beach and land below high water mark, in any stream, lake, navigable water, gulf or sea, in so far as the same shall be vested in the Crown and shall not be required by the Crown, to such extent as shall be required by the Company for its railway and other works, and as shall be exhibited by a map or plan thereof deposited in the office of the Minister of Railways. But the provisions of this sub-section shall not apply to any beach or land lying East of Lake Nipissing except with the approval of the Governor in Council.
b. It shall be sufficient that the map or plan and book of reference for any portion of the line of the railway not being within any district or county for which there is a Clerk of the Peace, be deposited in the office of the Minister of Railways of Canada; and any omission, mis-statement or erroneous description of any lands therein may be corrected by the Company, with the consent of the Minister and certified by him; and the Company may then make the railway in accordance with such certified correction.
c. The eleventh sub-section of the said eighth section of the Railway Act shall not apply to any portion of the railway passing over ungranted lands of the Crown, or lands not within any surveyed township in any Province; and in such places, deviations not exceeding five miles from the line shown on the map or plan as aforesaid, deposited by the Company, shall be allowed, without any formal correction or certificate; and any further deviation that may be found expedient may be authorized by order of the Governor in Council, and the Company may then make their railway in accordance with such authorized deviation.
d. The map or plan and book of reference of any part of the main line of the Canadian Pacific Railway made and deposited in accordance with this section, after approval by the Governor in Council, and of any branch of such railway hereafter to be located by the said Company in respect of which the approval of the Governor in Council shall not be necessary shall avail as if made and deposited as required by the said “Consolidated Railway Act, 1879,” for all the purposes of the said Act, and of this Act; and any copy of, or extract therefrom, certified by the said Minister or his deputy, shall be received as evidence in any court of law in Canada.
e. It shall be sufficient that a map or profile of any part of the completed railway, which shall not lie within any county or district having a registry office, be filed in the office of the Minister of Railways.
[142] What is clear and fatal to Canadian Pacific’s argument is that the restraint on alienation in subsection 7(3) of The Consolidated Railway Act, 1879 is not explicitly overridden. Paragraph 18(a) clearly addresses subsection 7(3), but only to extend the scope of the latter portion of that subsection relating to the taking, use or occupation of public beaches and lands below the high water mark of certain water bodies, title to which is vested in the Crown. The only reasonable inference is that, in acquiring Crown lands, the remaining elements of subsection 7(3) would apply. Thus, when acquiring Crown lands, Canadian Pacific does so subject to the restriction on alienation imposed by subsection 7(3). It is telling that in Vancouver, (City of) v. Canadian Pacific Ry. Co.,[82] a case dealing with lands taken pursuant to paragraph 18(a) of Schedule A to the contract, counsel for Canadian Pacific acknowledged that the restriction on alienation applied to lands so acquired, stating:[83]
The respondents [Canadian Pacific] have no power to alienate the foreshore inasmuch as they have the right to take, use and hold the beach and land to such extent as shall be required by the company for its proposed railway and other works, and for no other purpose. [Underlining added.]
[143] Surely, it must have been anticipated that Canadian Pacific would require additional Crown lands to complete the construction of the central and eastern segments of the railway and, in time, would be acquiring from the Crown title to these lands and those on which the federal government was building the western segment. If the restriction on alienation was not intended to apply to those lands, section 18 of Schedule A could have expressly precluded the application of subsection 7(3) of The Consolidated Railway Act, 1879. Indeed, that is what was required under subsection 2(2) and section 3 of that Act.
[144] In conclusion, I am of the view that article 22 of the contract does not displace or override the restraint on alienation imposed on Crown lands acquired by railway companies. Accordingly, Canadian Pacific could not legally obtain fee simple title to the right-of-ways. This determination means that the right-of-ways are “in the reserve” and that the notices of assessment are valid. It also follows that if article 22 of the contract is insufficient to override subsection 7(3) of The Consolidated Railway Act, 1879, because of its failure to expressly do so, then other provisions of the CPR Act and the contract which purport to transfer absolute title to the railway and which impose an obligation on the government to extinguish Indian title also lack the specificity required to oust the application of subsection 7(3). Nonetheless, I feel compelled to deal with the alternative issue as to whether the provisions of the CPR Act and contract override those of the Indian Act. As discussed earlier, under the latter Act fee simple title can be obtained only by way of a surrender as required by section 37 or by a taking under section 35. My reason for pursuing the alternative submission is that my construction of The Consolidated Railway Act, 1879 may be found to be in error. I hasten to add that all of the parties devoted considerable time to the two aspects of this issue.
(ii) The meaning of “absolute property”
[145] I cannot accept Canadian Pacific’s submission that, simply because of the extraordinary circumstances leading up to the signing of the contract and the passage of the CPR Act, it was intended that Canadian Pacific obtain fee simple title to reserve lands required for the construction and operation of the railway, so as to override the provisions of the Indian Act. With great respect, I doubt that the parties ever considered the exact nature of the legal title to be transferred to Canadian Pacific, so long as such title enabled Canadian Pacific to operate the railway efficiently and effectively. Otherwise, the parties would not have drafted a contract which is a model of brevity, compared to today’s standards, especially when considering the relatively vast sums of money involved.
[146] In my view, section 5 of the CPR Act and article 7 of the contract are ambiguous to the extent that they do not refer to the quality of title to be conveyed to Canadian Pacific. That is, they do not state that Canadian Pacific was to receive “absolute title” to real and personal property required for the building and operation of the railway. Section 5 merely provides that the government will convey the “Canadian Pacific Railway” described in “thirty-seventh Victoria, chapter fourteen” to Canadian Pacific and, thereafter, the railway would become the “absolute property” of Canadian Pacific. This leads to the question of what railway is described in “thirty-seventh Victoria, chapter fourteen”.
[147] As explained by the Supreme Court in C.P.R. v. A.G. for Saskatchewan,[84] section 5 of the CPR Act refers to The Canadian Pacific Railway Act, 1874[85] [S.C. 1874, c. 14]. That legislation describes an earlier attempt to construct a railway from sea to sea, but which floundered and provided the impetus for the contractual accord between Canadian Pacific and the Dominion government, which was reflected in the CPR Act of 1881. The 1874 Act refers, in general terms, to seven segments of the transcontinental railway which were to be constructed.
[148] A precise determination of what was to be conveyed to Canadian Pacific pursuant to section 5 of the CPR Act is complicated by the fact that the railway described in the 1874 legislation is greater in scope than that described in the contract. Of the seven railway segments to be built under the 1874 Act, three were not mentioned in the contract. It was for this reason that the Supreme Court concluded that the railway contemplated by the contract was not accurately described in the 1874 legislation and, therefore, the earlier legislation was not to be used in construing the contract.[86] In short, the fact that the railway was to become the absolute property of Canadian Pacific reveals nothing of the underlying title to the lands to be conveyed; it only demonstrates that the parties were preoccupied with identifying which segments of the railway were part of the bargain.
[149] In addition, the term “absolute” is itself ambiguous, a fact noted by Justice Thurlow (as he then was) in Halley, James J. v. Minister of National Revenue:[87]
In my opinion the word “absolute” even when used in a technical sense in connection with the vesting of property may signify at least two different legal concepts. In one sense it may be used to denote the lack of limitation of the extent or duration of an interest in personal property while in another it may mean the freedom of the interest from dependence on other things or persons.
[150] Similarly, in the present context, the term “absolute property” can be interpreted in one of two ways. It may be construed in its technical sense to conclude that Canadian Pacific received fee simple title to the rights-of-way. On the other hand, it may simply reflect the understanding that, as between the Dominion of Canada and Canadian Pacific, the former was to relinquish all of its rights to the railway. In my view, the second construction is the proper one because it accords with the rules of statutory interpretation. No court should be prepared to adopt a construction which undermines the proprietary rights of third parties, unless there are compelling reasons for doing so. Though no analogy is ever perfect, I offer the following to illustrate my point.
[151] Assume that the government and citizen X are squabbling over who is the true owner of the infamous “blackacre” and that they agree to resolve their differences in the following manner: the government provides a deed to citizen X “absolutely” relinquishing its interest in blackacre for $100. It is trite law that if blackacre is subject to a mortgage vested in a third party, citizen X takes blackacre subject to that security interest. Citizen X may have a cause of action against the government for breach of contract or covenant, but that does not affect the rights of the third party. It is equally trite law that you cannot sell what you do not own (nemo dat quod non habet). In the present case, the appellants are the third party, and they are entitled to the “use and benefit” of reserve lands and the protections provided under the Indian Act. The moral of the analogy is that the term “absolute property” should not receive a broad interpretation when the rights of third parties are affected. It follows that the provisions of the CPR Act and the contract should not be interpreted so as to extinguish Indian rights to reserve lands in the absence of clear and express language to the contrary.
[152] This analysis is further supported by the seminal decision of Justice La Forest, then of the New Brunswick Court of Appeal, in Re Estabrooks Pontiac Buick Ltd.,[88] in which he held that a restrictive interpretation of legislation which attempts to diminish the proprietary rights of third parties is preferable, absent specific statutory directions to the contrary.[89] Justice La Forest’s comments regarding statutory interpretation are of some significance in this regard:[90]
There is no doubt that the duty of the courts is to give effect to the intention of the Legislature as expressed in the words of the statute. And however reprehensible the result may appear, it is our duty if the words are clear to give them effect. This follows from the constitutional doctrine of the supremacy of the Legislature when acting within its legislative powers. The fact that the words as interpreted would give an unreasonable result, however, is certainly ground for the courts to scrutinize a statute carefully to make abundantly certain that those words are not susceptible of another interpretation. For it should not be readily assumed that the Legislature intends an unreasonable result or to perpetrate an injustice or absurdity. [Emphasis added.]
[153] It would be unreasonable to hold that the term “absolute property” extinguishes the interest of Indian bands in their reserve lands. The Indians’ interest in reserve lands is a pre-existing legal right[91] which finds its origins in the occupation of Canada by Aboriginal peoples prior to European settlement.[92] As noted above, the alienation of this interest is subject to stringent restrictions under the Indian Act and at common law through the fiduciary duty doctrine. To undermine these strong protections in the absence of express language would clearly be unreasonable. Such an approach would also undermine the canons of statutory interpretation that have developed in the context of Aboriginal rights.
[154] The general rule applicable when interpreting statutes relating to Indians is that ambiguities and “doubtful expressions” should be resolved in favour of the Indians.[93] Indeed, as Justice La Forest stated in Mitchell v. Peguis Indian Band:[94]
… it is clear that in the interpretation of any statutory enactment dealing with Indians, and particularly the Indian Act, it is appropriate to interpret in a broad manner provisions that are aimed at maintaining Indian rights, and to interpret narrowly provisions aimed at limiting or abrogating them. Thus if legislation bears on treaty promises, the courts will always strain against adopting an interpretation that has the effect of negating commitments undertaken by the Crown …. [Emphasis added.]
Similarly, in the case at bar, this Court should balk at adopting an interpretation which is tantamount to an implied extinguishment of the Indians’ interest in reserve lands.
[155] This approach is further supported by the concurring reasons of Chief Justice Dickson, in which he applies the general rule to third parties, stating:[95]
It is Canadian society at large which bears the historical burden of the current situation of native peoples and, as a result, the liberal interpretive approach applies to any statute relating to Indians, even if the relationship thereby affected is a private one. Underlying Nowegijick is an appreciation of societal responsibility and a concern with remedying disadvantage, if only in the somewhat marginal context of treaty and statutory interpretation. [Emphasis added.]
His reasons were uncontradicted on this point.
[156] I acknowledge that this interpretative rule does not automatically result in an interpretation that is favourable to the Indians. An examination of the statute with a view to discerning Parliament’s intent is required. Any interpretation must be reconciled with the policies underlying the provision, as measured against its impact on those who come within its ambit.
[157] In my view, there are no compelling reasons or policy considerations which mandate adopting the interpretation advanced by Canadian Pacific. It is neither reasonable nor necessary to hold that the term “absolute property” was intended to override the provisions of the Indian Act so as to effectively extinguish Indian title to reserve lands. First of all, article 12 of the contract expressly provides for the extinguishment of Indian title. Presumably, an express provision displaces the need to imply such a provision; thus, it is simply a matter of determining the scope of the extinguishment provision. Second, the legitimate expectations of Canadian Pacific at the time the contract was concluded are not undermined by the Indian Act.
[158] Some might be inclined to imply an extinguishment if to hold otherwise would defeat the purpose of section 5 of the CPR Act and article 7 of the contract and, correlatively, the legitimate expectations of Canadian Pacific. In my view, however, the CPR Act and the Indian Act can be read together without undermining those expectations. For example, in 1881, Canadian Pacific required only an easement to fulfil its contractual obligation to “efficiently maintain, work and run” the railway under article 7 of the contract, and the same holds true today. The 1988 decision of the Supreme Court in Canadian Pacific Ltd. v. Paul,[96] which held that a statutory easement is sufficient to support a permanent injunction, buttresses my point.
[159] In conclusion, Canadian Pacific has never needed any more than a statutory easement to effectively operate its railway lines across reserve lands and a statutory licence with respect to adjacent lands used in railway operations. In the absence of an express extinguishment, Canadian Pacific cannot legitimately claim more than is necessary to effectively operate its railway. The obligation imposed on the Crown to convey to Canadian Pacific absolute title to the railway, when properly construed, does not derogate from these two propositions.
(iii) The obligation to extinguish indian title
[160] The above analysis becomes irrelevant if article 12 of the contract imposes an obligation on the government to extinguish “Indian title”. Article 12 states that “[t]he Government shall extinguish the Indian title affecting the lands herein appropriated, and to be hereafter granted in aid of the railway”. Canadian Pacific maintains that this provision effectively requires the government to extinguish Indian title to all of the lands to be conveyed to Canadian Pacific, namely, the eastern, central and western segments of the railway. It argues that Parliament has expressed a clear intention, through the adoption of the CPR Act, to extinguish Indian title with respect to Canadian Pacific’s right-of-ways running through the appellants’ reserve lands.
[161] In my view, Canadian Pacific’s argument is flawed in two material respects. First, it presumes that the enactment of the CPR Act of 1881 was alone sufficient to extinguish Indian title to the lands in question and, therefore, no other positive act on the part of the Dominion government was necessary to achieve that end. Arguably, it was intended that the extinguishment of Indian title would be accomplished through the treaty process, not through the enactment of the Indian Act. However, as this issue was not raised by the appellants, I must base my decision on an alternative ground. My second and fundamental objection to Canadian Pacific’s argument is based on the fact that the obligation to extinguish Indian title was restricted to lands located within the central and eastern segments of the railway. It did not extend to the western segment. This particular objection raises the question as to why the Dominion government would agree to extinguish Indian title to lands within one stretch of the railway, but not another. Before addressing this apparent contradiction, I must deal with the arguments advanced by the parties.
[162] Canadian Pacific’s position is straightforward: it claims that the obligation to extinguish Indian title under article 12 applies to the entire railway line. The appellants argue that the lands referred to in article 12 are limited to those described in article 11. In turn, article 11 is said to refer to “subsidy lands” located alongside the railway line extending from “Winnipeg to Jasper House”, which are within the eastern and central segments of the railway. Accordingly, the appellants contend that, regardless of what is meant by the phrase “to extinguish Indian title”, article 12 does not apply to the western segment of the railway in which all of the disputed rights-of-way are found. Canadian Pacific counters with an alternative submission, namely, that article 12 applies also to section 10, and that the lands described in that latter provision encompass the entire railway line.
[163] In my respectful opinion, the appellants’ construction is the correct one. My analysis begins with the reproduction of section 3 of the CPR Act and articles 9, 10, 11 and 12 of the contract which read, in part, as follows:
3. Upon the organization of the said Company, and the deposit by them, with the Government, of one million dollars …, and in consideration of the completion and perpetual and efficient operation of the railway by the said Company, … the Government may grant to the Company a subsidy of twenty-five million dollars in money, and twenty-five million acres of land, … and may also grant to the Company the land for right of way, stations and other purposes ….
…
9. In consideration of the premises, the Government agree [sic] to grant to the Company a subsidy in money of $25,000,000, and in land of 25,000,000 acres, for which subsidies the construction of the Canadian Pacific Railway shall be completed and the same shall be equipped, maintained and operated,—the said subsidies respectively to be paid and granted as the work of construction shall proceed, in manner and upon the conditions following, that is to say:—
a. The said subsidy in money is hereby divided and appropriated as follows, namely:—
CENTRAL SECTION.
…
EASTERN SECTION.
…
And the said subsidy in land is hereby divided and appropriated as follows, subject to the reserve hereinafter provided for:—
CENTRAL SECTION.
…
EASTERN SECTION.
…
10. In further consideration of the premises, the Government shall also grant to the Company the lands required for the road bed of the railway, and for its stations, station grounds, workshops, … and other appurtenances required for the convenient and effectual construction and working of the railway, in so far as such land shall be vested in the Government ….
11. The grant of land hereby agreed to be made to the Company, shall be so made in alternate sections of 640 acres each, extending back 24 miles deep, on each side of the railway, from Winnipeg to Jasper House, in so far as such lands shall be vested in the Government …. But should any of such sections consist in a material degree of land not fairly fit for settlement, … the deficiency thereby caused … shall be made up from other portions in the tract known as the fertile belt … or elsewhere at the option of the Company ….
12. The Government shall extinguish the Indian title affecting the lands herein appropriated, and to be hereafter granted in aid of the railway.
[164] It is evident from the foregoing that, in addition to receiving title to the entire railway in return for its promise to construct the eastern and central segments, Canadian Pacific was also entitled to a “subsidy” of $25 million and 25 million acres of land. (The land subsidy aided the railway in that it ensured the economic viability of the project.) Furthermore, article 9 of the contract reveals that the land subsidy was to be “divided and appropriated” between the eastern and central segments. Article 11 states that the subsidy lands were to be granted in alternating sections of 640 acres, 24 miles deep, along each side of the railway “from Winnipeg to Jasper House”. These conveyances were conditional on the lands being vested in the “Government” (the federal Crown). Article 11 also provides that if there was a deficiency of land, that deficiency was to be made up from lands located in the “fertile belt”.
[165] Thus, when article 12 speaks of extinguishing Indian title to lands “herein appropriated, and to be hereafter granted in aid of the railway”, it is referring to lands granted as a subsidy under article 11. Canadian Pacific argues that the lands referred to in article 12 are also those described in article 10 because of the phrase “and to be hereafter granted in aid of the railway” in article 12. This argument might have some merit but for the fact that article 10 only refers to lands within the eastern and central segments of the railway line, not the western segment.
[166] Article 10 imposes an additional obligation on the Dominion government; namely, to convey lands to Canadian Pacific for the “construction and working of the railway” to the extent that such lands were “vested in the Government”. Obviously, if the Crown did not own such lands, Canadian Pacific would have been obligated to purchase them. However, article 10 does not state, as argued by Canadian Pacific, that the government was to convey any additional lands to Canadian Pacific for railway purposes. If that were the case, then that part of article 10 which refers to lands “required for the convenient and effectual construction and working of the railway” would have to be ignored. Article 10 only refers to lands in the eastern and central segments of the railway because Canadian Pacific did not need to acquire lands for the construction of the western segment—the government was obligated to construct that portion of the railway. Title to lands in the western segment had to be obtained from the province of British Columbia under section 11 of the Terms of Union. In turn, such lands were to be transferred to Canadian Pacific when construction of that segment was completed, pursuant to section 5 of the CPR Act and article 7 of the contract.
[167] In conclusion, articles 9, 10, 11 and 12 of the contract all apply to lands within the eastern and central segments of the railway. However, articles 11 and 12 apply only to those lands lying between Winnipeg and Jasper House. It follows that the obligation to extinguish Indian title does not apply to the lands in question. As a matter of statutory interpretation and historical necessity, this makes eminently good sense.
(d) Why extinguish Indian title in the Prairies, and not British Columbia?
[168] I now propose to return to the issue as to why the parties would agree to limit the government’s obligation to extinguish Indian title to a portion of the railway, rather than the whole. I acknowledge that, strictly speaking, it is unnecessary for me to address that question. I do so only to demonstrate that the interpretation which I have placed on article 12 does not give rise to an illogical or absurd distinction.
[169] It is not difficult to understand why Canadian Pacific would insist on the government extinguishing Indian title to lands which we now describe collectively as the Prairie provinces. The subsidy lands described in article 11 formed part of Rupert’s Land, which had been surrendered by the Hudson’s Bay Company to Her Majesty. Pursuant to an Imperial Order in Council issued in 1870, Rupert’s Land was admitted into the Union, together with the North-Western Territories [Rupert’s Land and North-Western Territory Order, R.S.C., 1985, Appendix II, No. 9]. Under the terms of that Order in Council, any claims by Indians to compensation for lands required for settlement were to be dealt with by the Canadian government in consultation with the Imperial government. A schedule to the Order in Council stated that it was the government’s duty to make adequate provision for the protection of the Indian tribes. In light of these obligations, the Canadian government recognized Aboriginal title to the lands and began negotiating “numbered treaties”. Of course, at the time the CPR Act of 1881 was enacted, the treaty process was on-going in the prairie provinces.
[170] This explains why Canadian Pacific would want to ensure that “Indian title” to subsidy lands within the eastern and central segments of the railway would be extinguished. However, it does not provide an explanation for the failure of the contract to impose that obligation on the government in respect of railway lands in the western segment, that is, in British Columbia. One possible explanation is now a matter of public record. When British Columbia joined Confederation in 1871, and at the time of the CPR Act and contract in 1881, the prevailing view was that Aboriginal title did not exist in British Columbia, because it had been extinguished by legislation enacted by the colony of British Columbia prior to Confederation. This view was raised by the Supreme Court in Calder et al. v. Attorney-General of British Columbia[97] and was accepted by the Trial Judge in Delgamuukw v. British Columbia.[98] It is sufficient for my purposes to note that there is a plausible rationale for the failure of the CPR Act and contract to impose an obligation on the government to extinguish Indian title to railway lands in British Columbia. Correlatively, there is a rational explanation for the imposition of such a requirement with respect to the railway lands in the Prairie provinces.
[171] In closing, I would like to draw attention to the fact that the numbered treaties expressly provided that the government would not sell, lease or otherwise dispose of reserve lands without the consent of the Indians. Treaty 3, which was signed in 1873, states:
… the aforesaid reserves of lands, or any interest or right therein or appurtenant thereto, may be sold, leased or otherwise disposed of by the said Government for the use and benefit of the said Indians, with the consent of the Indians entitled thereto first had and obtained …. [Emphasis added.]
[172] Treaties 4 (1875), 5 (1875), 6 (1876) and 7 (1877) contain similar provisions and were entered into between 1873 and 1877. With respect to Treaty 7, signed in 1877, confusion arose over the exact location of the original Blackfoot reserve and there was concern that Canadian Pacific’s railway was traversing reserve lands.[99] On June 27, 1883, and after the CPR Act of 1881 had been brought into force, a new treaty was signed whereby the “Indian tribe” agreed to give up its strip of land in return for a new reserve bordering on the railway right-of-way. This particular historical episode supports the view that the CPR Act was never intended to extinguish Indian title to reserve lands without the consent of the Indians. Quaere: Why is it presumed that extinguishment of Indian title would be achieved by the mere adoption of the CPR Act, as opposed to the treaty process? Why bother negotiating treaties only to pass legislation which overrides fundamental concessions granted to the Indians? These are questions I need not address. But in the event that this case proceeds to another judicial forum, those questions might warrant serious consideration.
(e) Conclusion
[173] In conclusion, I am of the view that the CPR Act did not authorize the government to convey fee simple title to the rights-of-way crossing the appellants’ reserves to Canadian Pacific. Notwithstanding what the letters patent purport to convey, Canadian Pacific was and is entitled to no more than a statutory easement or licence with respect to each of the 15 disputed rights-of-way. This is so because of the restriction on the alienation of Crown lands acquired by railway companies in the Railway Act. The provisions of the CPR Act and contract do not override that restriction because they fail to expressly state that the relevant provision of the Railway Act was being displaced, as required under the latter Act. Alternatively, the obligation of the Dominion government to convey “absolute title” to the railway to Canadian Pacific cannot be construed as an obligation to convey fee simple title to the rights-of-way. The title obligation simply reflects the understanding that, as between these two parties, the Dominion government was to relinquish all of its rights in the railway to Canadian Pacific. It does not mean that the government intended to abrogate Indian rights guaranteed under the Indian Act . In addition, the obligation upon the Dominion government to extinguish “Indian title” applies only to the central and eastern segments of the railway, and not the western segment in which all of the rights-of-way in question are situated.
[174] It follows that Canadian Pacific’s rights-of-way are “in the reserve” within the meaning of section 83 of the Indian Act. It also follows that the notices of assessment issued pursuant to the appellants’ taxation by-laws are valid, unless the by-laws themselves are found to be invalid.
B. Are the taxation by-laws invalid on the ground of unauthorized discrimination?
[175] Canadian Pacific challenges the appellants’ taxation by-laws on the ground that the exemption from taxation of the appellant Indian bands and their members constitutes unauthorized discrimination. The by-laws of four of the bands also exempt corporations whose shares are owned by the band. The Matsqui by-law provides further exemptions for status Indians, as defined in the Indian Act, and corporations whose shares are beneficially owned by band members. However, unauthorized discrimination was argued solely on the basis of the exemption accorded the interests of band members living on reserve lands.[100] The following analysis addresses only this allegation.
[176] In essence, Canadian Pacific argues that the differential tax treatment accorded non-Indians on reserve lands amounts to discrimination which is not authorized by sections 83 and 87 of the Indian Act. The relevant portions of these provisions read as follows:
83. (1) Without prejudice to the powers conferred by section 81, the council of a band may, subject to the approval of the Minister, make by-laws for any or all of the following purposes, namely,
(a) subject to subsections (2) and (3), taxation for local purposes of land, or interests in land, in the reserve, including rights to occupy, possess or use land in the reserve;
…
(3) A by-law made under paragraph (1)(a) must provide an appeal procedure in respect of assessments made for the purposes of taxation under that paragraph.
(4) The Minister may approve the whole or a part only of a by-law made under subsection (1).
…
87. (1) Notwithstanding any other Act of Parliament or any Act of the legislature of a province, but subject to section 83, the following property is exempt from taxation, namely,
(a) the interest of an Indian or a band in reserve lands or surrendered lands; and
…
(2) No Indian or band is subject to taxation in respect of the ownership, occupation, possession or use of any property mentioned in paragraph (1)(a) or (b) or is otherwise subject to taxation in respect of any such property.
[177] These provisions clearly establish that Indians are not subject to taxation with respect to their interest in reserve lands (including designated lands) unless a by-law adopted under section 83 states otherwise. However, it is equally clear that these sections do not address the question of whether an Indian band may exempt itself and its members from a taxation by-law adopted under section 83. In other words, these sections do not expressly authorize an Indian band to pass a by-law which only taxes the interests of non-Indians on reserve lands.
[178] Canadian Pacific argues that the rules of statutory interpretation require delegated legislative authority to be construed as precluding discriminatory legislation, unless the delegating statute expressly permits such discrimination or it arises by necessary implication. This rule was first adopted by the Supreme Court in Arcade Amusements, in which Justice Beetz stated:[101]
The rule that the power to make by-laws does not include that of enacting discriminatory provisions unless the enabling legislation provides the contrary has been observed from time immemorial in British and Canadian public law. It has been and still is applied in municipal law.
[179] After reviewing the abundant case law applying this rule, Justice Beetz summarized the principle as follows:[102]
It must be held that, in the absence of express provisions to the contrary or implicit delegation by necessary inference, the sovereign legislator has reserved to itself the important power of limiting the rights and freedoms of individuals in accordance with such fine distinctions. The principle transcends the limits of administrative and municipal law. It is a principle of fundamental freedom. [Emphasis added.]
Accordingly, it is argued that authority for the differential tax treatment embodied in the impugned by-laws must be found in the express language of the Indian Act or by necessary implication.
[180] It is common ground that there is no express provision in the Indian Act permitting the differential tax treatment of band members on reserve lands. Indeed, Canadian Pacific notes that section 83 of the Indian Act does not contain any language which supports the inference that band councils have the power to discriminate between band members and non-Indians with respect to taxation. In addition, it submits that there are no grounds on which to imply such a power.
[181] Canadian Pacific also maintains that a narrow construction of section 83, which would deny Indian bands the power to discriminate in favour of band members, would not effect a change in the tax exemption enjoyed under section 87, since section 87 only provides immunity from federal and provincial taxation. Finally, Canadian Pacific submits that it is simply unfair to impose the entire burden of taxation on non-Indians, particularly those that would not receive any services funded by such taxes. Since I am of the respectful view that these submissions cannot succeed, I need not outline each of the appellants’ counter-arguments. I will, however, deal with some of the arguments raised by the interveners.
[182] Section 87 of the Indian Act expressly provides that the tax exemption outlined therein can be overridden by a by-law adopted under section 83. Indeed, by the phrase “but subject to section 83”, section 87 expressly allows a band council to tax band members’ interests in reserve lands. This accords with the underlying rationale of section 83, namely, the promotion of Aboriginal self-government, by allowing Indian bands to develop revenue streams independent of the federal and provincial governments through taxation. Accordingly, it is not necessary to determine whether such exemption extends beyond federal and provincial taxes. The central question in these appeals is whether a band council must tax both Indians and non-Indians when enacting a taxation by-law.
[183] I accept that ministerial approval of a taxation by-law is of no significance for the reason that the Minister is subject to the same constraints as the appellant Indian bands. I also accept Canadian Pacific’s right to invoke municipal law principles dealing with discrimination. The courts have frequently drawn an analogy between the powers exercised by an Indian band council and a municipality.[103] However, it is important to note that the powers of a band council extend beyond those granted to a municipality.[104] Nevertheless, I am bound by Justice Beetz’s classic statement that the discrimination principle transcends that of municipal law; it is “a principle of fundamental freedom”.
[184] To the extent that the by-laws in question can be said to be discriminatory, such discrimination is based on “race”, since non-Indians are treated differently than band members even though both occupy lands within a reserve. Whether this apparent inequality is discriminatory within the meaning of section 15 of the Canadian Charter of Rights and Freedoms [being Part I of the Constitutional Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, No. 44]] is a separate question, which need not be decided since neither the Charter nor other human rights legislation has been invoked in this case.[105] Understandably, the law will not readily condone the unequal treatment of people based on racial classification, whether the discriminatory law is adopted by the federal government, a federal agency, a provincial government, a municipality or an Indian band council.
[185] While accepting the above proposition, I pause here to observe that the concept of unacceptable discrimination often depends upon the way in which legal issues are framed. For those who view the issue before us as involving a taxation scheme which benefits Indians at the expense of non-Indians, the concept of “good governance” would appear to prescribe the equal treatment of all citizens, regardless of race. On the other hand, I understand that the Indian bands in question might view the issue differently. For them, the concept of “self-government” is better equated with the idea of autonomy and, correlatively, a diminished role for federal and provincial governments. In the present case, the Indian bands have sought to exempt themselves and their members from taxation, while imposing taxes on non-Indians occupying reserve lands. This approach is understandable in light of the fact that reserve lands were set aside for the use and benefit of Indians, even though legal title continues to reside with the Crown. It is fair to assume that Indians view reserve lands as their own, just as other Canadians take pride in owning real estate. However, the Indians’ right of exclusive possession of reserve lands is undermined by the right of others to traverse such lands pursuant to statutory authority. The fact that the owners of the right-of-ways, such as Canadian Pacific, paid for the use of the reserve lands does not detract from their obligation to pay property taxes. It is only a question as to whom such taxes should be paid. Understandably, the Indian bands in this case do not wish to be compelled to tax themselves in order to impose taxes upon those who use their lands.
[186] There are really only two issues to be addressed with respect to the discrimination issue. The first, asserted by Chief Jules and the Indian Taxation Advisory Board as interveners, concerns whether Parliament intended to authorize the type of discrimination alleged by Canadian Pacific. The second is whether the authority to discriminate arises by necessary implication, as contemplated by Arcade Amusements, supra. This latter question can only be answered by weighing the competing policy considerations advanced by the appellants and Canadian Pacific.
[187] Chief Jules states in his affidavit that the issue of whether reserve lands occupied by Indians could retain their exempt status without affecting the right to tax non-Indians was raised by him with the Department of Indian Affairs when the Kamloops Amendments were being considered. Chief Jules goes on to state that a legal opinion was sought on the issue, and that counsel for the Minister opined that Indian bands could adopt by-laws taxing only non-Indians’ interests on reserve lands. A copy of that legal opinion was submitted as an exhibit to Chief Jule’s affidavit. While such evidence is admissible according to Re B.C. Motor Vehicle Act,[106] that case dictates that it can be given little if any weight.
[188] It is clear that the Kamloops Amendments were enacted solely to ensure that lands surrendered for the purpose of leasing were “in the reserve” and, therefore, subject to taxation by the Indian band under section 83. If exempting the interests of band members on reserve lands from these taxation by-laws was also of concern to the Minister and Parliament, then surely the issue could have been dealt with at that time. Only those responsible for the swift passage of the amendments through Parliament can address why the amendments did not expressly deal with this problem.
[189] The only objective evidence of Parliamentary intent is found in a pamphlet distributed by the Minister which echoes the appellants’ argument that reserve Indians would remain exempt from taxation. Such statements of administrative policy and interpretation are not determinative, but are entitled to some weight.[107] Standing alone, however, that evidence is not sufficient to support the appellants’ argument. This leads me to the second of the two questions outlined above.
[190] The remaining question is whether this Court is prepared to find an implied authorization to discriminate. Any time a court of law is asked to read an implied term into a statute, that court is being asked to consider competing interests, and to determine which of the competing interests should prevail. In my respectful view, the balance favours the appellants’ interests.
[191] At the outset, I must point out that there are two potential considerations which, at the end of the day, are neutral in that neither supports nor detracts from the positions of the parties. First, it is common ground that the notion of “taxation without representation” has no relevance to these appeals. Simply taxing Indians occupying reserve lands would not change the reality that non-Indians would still be taxed without representation. Second, Canadian Pacific is not seeking to avoid paying taxes, since its right-of-ways would be subject to taxation under municipal by-laws or the provincial property taxation regime in British Columbia if they were found not to be taxable by the appellant Indian bands.
[192] There are two policy considerations advanced by the appellants and interveners which support an implied authorization to discriminate by necessary implication. In my view, only the second is persuasive. The first consideration was raised by the intervener, the Little Shuswap Indian Band. It argues that it would be impractical to tax band members’ interests in reserve lands because of the difficulty of assessing their land values. This argument is premised on the fact that such interests cannot be equated with fee simple title, posing a problem with respect to the method of valuing land without reference to market concepts. However, this argument also applies to the interests of non-Indians in reserve lands, since their title is necessarily less than fee simple. For example, in Canadian National Railway Co. v. Matsqui Indian Band, supra, Canadian National was found to have acquired a fee simple determinable to its right-of-ways. While it is undoubtedly difficult to place a value on a fee simple determinable interest in reserve land which may revert to the appellants, Canadian Pacific’s lands have always been subject to taxation and assessment, and the same could be done with other reserve lands.
[193] The second consideration flows from the fact that reserve Indians have been tax exempt from the time of the first Indian Act.[108] The tax exemption in section 87 of the Indian Act for the Indian interest in reserve lands and property derives from the historic obligation of the Crown to protect Indian lands, an obligation which was first recognized by The Royal Proclamation, 1763.[109] Such an exemption is also consistent with the notion of Aboriginal sovereignty over reserve lands or, in other words, Aboriginal self-government.[110] Furthermore, Aboriginal sovereignty has been recognized as the source of the tax exemption over reserve lands and property in the United States, and the Supreme Court of Canada may be moving in a similar direction.111
[194] Accordingly, the tax exemption for reserve lands in section 87 may be seen as an inherent Aboriginal right, stemming from the historic occupation of such lands by autonomous Aboriginal societies. While such a characterization will undoubtedly lead to questions as to the scope of the exemption and extinguishment, it is not necessary to decide those issues here. It is sufficient to note that, to the extent that the tax exemption for the Indian interest in reserve lands flows from notions of Aboriginal sovereignty, such exemption should be protected in the absence of statutory directions to the contrary.
[195] It is highly significant that the Indian Act, by its very nature, draws distinctions between Indians and non-Indians in Canada. Indeed, the codified tax exemption in section 87 constitutes a significant distinction between Indians and non-Indians. Such distinctions are within Parliament’s jurisdiction to enact, due to its exclusive authority over “Indians and lands reserved for Indians” in class 24, section 91 of the Constitution Act, 1867. By-laws enacted by an Indian band pursuant to section 83 of the Indian Act constitute subordinate legislation. Accordingly, it is reasonable to imply that the constitutional authority to distinguish between Indians and non-Indians for the purpose of taxation was delegated to the Indian band councils.
[196] At the end of the day, the only pertinent policy argument advanced by Canadian Pacific to counter an implied authorization to discriminate between Indians and non-Indians for the purpose of taxation is that such by-laws would be potentially unfair or abusive. Canadian Pacific offered the hypothetical example of a band council which constructed a community centre out of tax dollars provided by the only taxable entity occupying reserve lands, namely, Canadian Pacific. The appellants challenge the perception that the taxation by-laws in question have been drafted so as to achieve the unfairness alluded to by Canadian Pacific. The appellants point out, and rightly so, that there are appeal processes in place which Canadian Pacific has access to, in addition to the courts. As well, it has been pointed out that band authorities do not carry out the assessments. That is presently done by the British Columbia Assessment Authority which is under the direction of the provincial government. In my view, any attempt by a band council to impose the entire burden of taxation solely on non-Indians would not survive the light of day. This view was shared by counsel for the respective appellants.
[197] For all of these reasons, I am prepared to hold that there is, by reasonable implication, authority on the part of band councils to continue to exempt the property interests of reserve Indians from taxation.
VI. DISPOSITION
[198] The appeals should be allowed with costs. The judgments rendered below should be set aside and substituted with an order dismissing each of the applications for judicial review.
[1] R.S.C., 1985, c. I-5 (as am. by R.S.C., 1985 (4th Supp.), c. 17, s. 10).
[2] These terms are defined in s. 2(1) [as am. by R.S.C., 1985 (4th Supp.), c. 17, s. 1] as follows:
2. (1) …
“designated lands” means a tract of land or any interest therein the legal title to which remains vested in Her Majesty and in which the band for whose use and benefit it was set apart as a reserve has, otherwise than absolutely, released or surrendered its rights or interests, whether before or after the coming into force of this definition;
…
“reserve”
(a) means a tract of land, the legal title to which is vested in Her Majesty, that has been set apart by Her Majesty for the use and benefit of a band, and
(b) except in subsection 18(2), sections 20 to 25, 28, 36 to 38, 42, 44, 46, 48 to 51, 58 to 60 and the regulations made under any of those provisions, includes designated lands;
[3] Canadian Pacific Ltd. v. Matsqui Indian Band, (1998), 162 D.L.R. (4th) 649 (F.C.A.).
[4] Id., Décary J.A.’s reasons, at pp. 667-668:
Yet, in my view, the expression “right of way”, in the context in which it was used, merely described the land taken and did not qualify the interest on the land that was surrendered. The expression was used, in other words, to define precisely what land was taken; it was not used to describe what right in that land was meant to be given up by the Band. Finally, the expression was used in all the documents in the context of an outright sale of land.
[5] The Railway Act, S.C. 1888, c. 29, as in force in 1891, the time of the first conveyance.
[6] I say “probably” because the conclusion may not be so automatic following the decision of this Court in Kruger v. The Queen, [1986] 1 F.C. 3 (C.A.), where it was apparently found that the surrender provision of the Indian Act [R.S.C. 1927, c. 98] would not apply in instances of alienation resulting from a taking by the Crown pursuant to s. 48 of the Indian Act.
[7] S.C. 1881, c. 1.
[8] (1894), 23 S.C.R. 1.
[9] (1905), 36 S.C.R. 42, at p. 74.
[10] S.B.C. 1880, c. 11.
[11] S.B.C. 1883, c. 14.
[12] See generally D. M. Smith, Title to Indian Reserves in British Columbia (Faculty of Law, University of British Columbia, Vancouver, 1988). It is not clear, however, whether there was ever any intention on the part of the provincial government to approve reserves located within areas which were to be part of the railway belt.
[13] Order in Council P.C. 1930-1116.
[14] The grant of the right-of-way dated August 25, 1891 refers to “that certain strip or portion of land occupied by the Mission Branch of the Canadian Pacific Railway”. See Appeal Book, Vol. 1, of A-389-96, at p. 174.
[15] The grant of land to Canadian Pacific dated December 9, 1968 refers to a “railway widening according to plan 53921 in the Canadian Land Survey Records in Ottawa”. See CPR Reference Volume, at tab 4.
[16] With respect to the use of punctuation in aid of interpretation of a statute, see Côté, P.-A. The Interpretation of Legislation in Canada, 2nd ed., Cowansville (Qué.): Éditions Yvon Blais Inc., 1991, at p. 62.
[17] See Canadian Pacific Ltd. v. Paul, [1988] 2 S.C.R. 654.
[18] R.S.C., 1985, c. I-5.
[19] It is stated that if a corporation’s shares are held, in whole or in part, by band members in trust for any person who is not a band member, then such corporation’s real property is not exempt from taxation.
[20] (A-389-96), A.B., at p. 36.
[21] (A-480-96), A.B., at p. 14.
[22] (A-386-96), A.B., at p. 37.
[23] (A-479-96), A.B., at p. 29.
[24] (A-403-96), A.B., at p. 41. The intervener, the Indian Taxation Advisory Board, has indicated in its brief that 69 First Nation communities across Canada currently have real property taxation by-laws in force which contain exemptions for the band and band members similar to those contained in the bands’ by-laws in the case at bar.
[25] British Columbia (Assessor of Area #25—Northwest/Prince Rupert) v. N & V Johnson Services Ltd. (1990), 73 D.L.R. (4th) 170 (B.C.C.A.). Westbank Property Management Ltd. v. Assessor of Area #19—Kelowna, [1993] 1 C.N.L.R. 176 (B.C.S.C.); see also Re Kinookimaw Beach Association and The Queen in right of Saskatchewan (1979), 102 D.L.R. (3d) 333 (Sask. C.A.); Re Stony Plain Indian Reserve No. 135 Development (1981), 35 A.R. 412 (C.A.); Virginia L. Davies, “The Use of Inter Vivos Trusts to Preserve Treaty Entitlements” in Report of Proceedings of the Forty-Fifth Tax Conference (Toronto: Canadian Tax Foundation, 1993) 54:1, at p. 54:5.
[26] S.B.C. 1990, c. 52.
[27] Canadian Pacific Ltd. v. Matsqui Indian Band, [1996] 3 F.C. 373 (T.D.), at p. 419.
[28] [1990] 2 S.C.R. 85, at pp. 130-131.
[29] [1992] 1 S.C.R. 877, at p. 885.
[30] S.C. 1988, c. 23, s. 10 [R.S.C., 1985 (4th Supp.), c. 17, s. 10].
[31] [1995] 1 S.C.R. 3, at p. 24.
[32] [1997] 2 S.C.R. 657, at pp. 672-674, para. 24.
[33] Underlined in text.
[34] [1985] 1 S.C.R. 368. Also known as Fountainhead Fun Centres Ltd., v. Montréal (City).
[35] Id., at p. 404.
[36] Id., at p. 406.
[37] Id., at p. 413.
[38] [1993] 1 S.C.R. 650, at pp. 667-668. See also Forget v. Quebec (Attorney General), [1988] 2 S.C.R. 90, at p. 105; Shell Canada Products Ltd. v. Vancouver (City), [1994] 1 S.C.R. 231, at pp. 259 and 275.
[39] [1990] 1 S.C.R. 1025.
[40] [1990] F.C.J. No. 546 (C.A.) (QL).
[41] [1995] 1 S.C.R. 3, at p. 33.
[42] (1982), 135 D.L.R. (3d) 128 (Sask. C.A.), at pp. 133-134.
[43] (1981), 63 C.C.C. (2d) 61 (Que. C.A.), at p. 68. See also T. F. Isaac, Aboriginal Law: Cases, Materials and Commentary, 2nd ed. (Saskatoon: Purich Publications, 1999), at p. 505. ff.
[44] [1995] 1 S.C.R. 3, at pp. 33-34, para. 43.
[45] The term “designated land”, a defined term in the Act, is comprised in the definition of “reserve”, also defined. See R.S.C., 1985, c. I-5, s. 2(1) [as am. by R.S.C., 1985 (4th Supp.), c. 17, s. 1].
[46] P. W. Hogg, Constitutional Law of Canada, Fourth Student Edition (Toronto: Carswell, 1996), at p. 344, para 15.6.
[47] See Canadian Pacific Ltd. v. Matsqui Indian Band, [1995] 1 S.C.R. 3, at p. 24.
[48] S.C. 1881, c. 1.
[49] Canadian Pacific Ltd. v. Matsqui Indian Band (1998), 162 D.L.R. (4th) 649 (F.C.A.); leave to appeal to the Supreme Court of Canada denied March 25, 1999 [[1999] 1 S.C.R. x].
[50] Now reported at [1996] 3 F.C. 373 (T.D.).
[51] Id., at pp. 412-413.
[52] Id., at pp. 414-415.
[53] See The Consolidated Railway Act, 1879, S.C. 1879, c. 9, s. 7(3). The Railway Act, S.C. 1888, c. 29, s. 99 (and successor legislation) retained this requirement.
[54] See Sir Robert Megarry and M. P. Thompson, Megarry’s Manual of the Law of Real Property, 7th ed. (London: Sweet & Maxwell, 1993), at pp. 35 and 197-198.
[55] An Act to amend the Indian Act (designated lands), R.S.C., 1985 (4th Supp.), c. 17, s. 1.
[56] (1984), 11 D.L.R. (4th) 226 (B.C.C.A.).
[57] St. Mary’s Indian Band v. Cranbrook (City), [1997] 2 S.C.R. 657, at p. 675.
[58] See Megarry, supra, note 55, at pp. 59 and 321-322.
[59] See, for example, Thompson v. Fraser Companies Ltd., [1930] S.C.R. 109; and The King v. Bonhomme (1917), 16 Ex. C.R. 437; affd (1918), 59 S.C.R. 679.
[60] St. Mary’s Indian Band, supra, note 58, at p. 668.
[61] See generally Gerard V. La Forest, Natural Resources and Public Property under the Canadian Constitution (Toronto: University of Toronto Press, 1969), at pp. 132-133.
[62] The provincial and federal orders in council which adopted the McKenna-McBride Agreement did not deal with the province’s reversionary interest in reserve lands. That issue was finally addressed with the adoption of the Scott-Cathcart Agreement in 1938 by B.C. Order in Council 1036. See B.C. (A.G.) v. Mount Currie Indian Band (1991), 54 B.C.L.R. (2d) 156 (C.A.), per Anderson J.A. (Toy, Proudfoot and Hinds JJ.A. concurring).
[63] See Megarry, supra, note 55, at pp. 59 and 321-322.
[64] S.C. 1880, c. 28. This Act consolidated and amended the laws respecting Indians which had been enacted from 1868 to 1879.
[65] S. 36 of The Indian Act, 1880 became s. 38 (The Indian Act, R.S.C. 1886, c. 43), then s. 48 of the Indian Act (R.S.C. 1906, c. 81), then s. 50 (R.S.C. 1927, c. 98) and finally s. 37 (S.C. 1951, c. 29). The current wording of s. 37 of The Indian Act was enacted as part of the Kamloops Amendments, supra, note 56.
[66] S. 31 of The Indian Act, 1880 became s. 35 (The Indian Act, R.S.C. 1886, c. 43); then s. 46 of the Indian Act, R.S.C. 1906, c. 81; then s. 48 of the Indian Act, R.S.C. 1927, c. 98; and finally s. 35 of The Indian Act, R.S.C. 1951, c. 29.
[67] An Act to amend “The Indian Act”, S.C. 1887, c. 33, s. 5.
[68] An Act to amend the Indian Act, S.C. 1911, c. 14, s. 1.
[69] The Railway Act, supra, note 54, s. 103.
[70] Opetchesaht Indian Band v. Canada, [1997] 2 S.C.R. 119, at p. 157 (per McLachlin J.). See also Kruger v. The Queen, [1986] 1 F.C. 3 (C.A.), at pp. 17-19 (per Heald J.A.) and at p. 48 (per Urie J.A.).
[71] Supra, note 54.
[72] R.S.C., 1985, c. I-5, s. 35.
[73] I acknowledge that s. 28 of the Indian Act authorizes the Minister to issue permits enabling any persons to use or occupy reserve lands. These permits are limited to a period not exceeding one year, unless the band council consents to a longer duration. This provision is not applicable in the case at bar.
[74] S.C. 1879, c. 9.
[75] Megarry, supra, note 55, at p. 34. See also E. H. Burn, Cheshire and Burn’s Modern Law of Real Property, 15th ed. (London: Butterworths, 1994); In Re Macleay (1875) L.R. 20 Eq. 186; and Dugdale v. Dugdale (1888), 38 Ch. D. 176.
[76] See, for ex., Reese et al. v. The Queen [1957] S.C.R. 794; Hartley v. Matson (1902), 32 S.C.R. 644; and St. Ann’s Fishing Club v. The King, [1959] S.C.R. 211.
[77] Canada Transportation Act, S.C. 1996, c. 10, s. 185. s. 2 and 3 of The Consolidated Railway Act, 1879 became s. 3 of The Railway Act, R.S.C. 1886, c. 109 and then ss. 5-6 of The Railway Act S.C. 1888, c. 29. These sections were ultimately re-enacted in a form substantially the same as the 1985 enactment in 1903 (The Railway Act, 1903, S.C. 1903, c. 58, s. 5) and became s. 4 in the 1906 revisions Railway Act, R.S.C. 1906, c. 37. S. 7(3) of the 1879 Act became s. 99 (The Railway Act, S.C. 1888, c. 29), then s. 189 (Railway Act, R.S.C. 1927, c. 170), s. 192 (Railway Act, R.S.C. 1952, c. 234), s. 130 (Railway Act, R.S.C. 1970, c. R-2) and ultimately s. 134 (Railway Act, R.S.C., 1985, c. R-3). The provision requiring compensation for the use, taking or damage to reserve lands was first enacted as s. 101 (S.C. 1888, c. 29). It became s. 136 (S.C. 1903, c. 58), then s. 175 (R.S.C. 1906, c. 37), s. 192 (S.C. 1919, c. 68), s. 195 (R.S.C. 1952, c. 234), s. 133 (R.S.C. 1970, c. R-2) and finally s. 137 (R.S.C. 1985, c. R-3).
[78] See Kruger, supra, note 71; Osoyoos Indian Band v. Oliver (Town) (1997), 145 D.L.R. (4th) 552 (B.C.S.C.); and Gitanmaax Indian Band v. British Columbia Hydro and Power Authority (1991), 84 D.L.R. (4th) 562 (B.C.S.C.).
[79] The historical events leading up to Confederation provide some of the context for the passage of the CPR Act. These events are eloquently summarized in St. Catherine’s Milling and Lumber Company v. Reg. (1888), 14 App. Cas. 46 (P.C.), at pp. 53-56.
[80] R.S.C., 1985, Appendix II, No. 10.
[81] (1894), 23 S.C.R. 1.
[82] Id., at p. 9.
[83] [1951] S.C.R. 190.
[84] Id., at p. 199.
[85] Id., at p. 200.
[86] [1963] Ex. C.R. 372, at p. 375.
[87] (1982), 44 N.B.R. (2d) 201 (C.A.).
[88] Id., at pp. 212-214.
[89] Id., at p. 210.
[90] Guerin et al. v. The Queen et al., [1984] 2 S.C.R. 335, at pp. 378-379.
[91] Delgamuukw v. British Columbia, [1997] 3 S.C.R. 1010, at p. 1082.
[92] Nowegijick v. The Queen, [1983] 1 S.C.R. 29.
[93] [1990] 2 S.C.R. 85, at p. 143.
[94] Id., at p. 99.
[95] [1988] 2 S.C.R. 654.
[96] [1973] S.C.R. 313 (per Judson J.).
[97] (1991), 79 D.L.R. (4th) 185 (B.C.S.C.); varied (1993), 104 D.L.R. (4th) 470 (B.C.C.A.); revd in part [1997] 3 S.C.R. 1010. See also P. Tennant, Aboriginal Peoples and Politics: The Indian Land Question in British Columbia, 1849-1989 (Vancouver: University of B.C. Press, 1990), at pp. 39-52.
[98] See Hugh A. Dempsey, Treaty Research Report: Treaty Seven (Ottawa: Treaties and Historical Research Centre, 1987), at pp. 48-49.
[99] There may be additional issues with respect to the exemption of corporations whose shares are owned by the band or band members since such corporations are not “Indians” within the meaning of the Indian Act. See, for ex., Four B Manufacturing Ltd. v. United Garment Workers of America et al., [1980] 1 S.C.R. 1031; Western Industrial Contractors Ltd. v. Sarcee Development Ltd. (1979), 15 A.R. 309 (C.A.); and British Columbia (Assessor of Area #25—Northwest-Prince Rupert) v. N & V Johnson Services Ltd. (1990), 73 D.L.R. (4th) 170 (B.C.C.A.). However, these issues were not argued before this Court.
[100] Montréal (City of) v. Arcade Amusements Inc. et al., [1985] 1 S.C.R. 368, at p. 404.
[101] Id., at p. 413.
[102] See Whitebear Band Council and Carpenters Provincial Council of Saskatchewan et al. Re (1982), 135 D.L.R. (3d) 128 (Sask. C.A.); Sabattis v. Oromocto Indian Band (1986), 76 N.B.R. (2d) 227 (C.A.); Chadee v. Norway House First Nation (1996), 113 Man. R. (2d) 110 (C.A.); Deer v. Mohawk Council of Kahnawake, [1991] 2 F.C. 18 (T.D.); and Batchewana Indian Band (Non-resident members) v. Batchewana Indian Band, [1994] 1 F.C. 394 (T.D.)
[103] Chippewas of Nawash First Nation v. Canada (Minister of Indian and Northern Affairs) (1996), 41 Admin. L.R. (2d) 232 (F.C.T.D.).
[104] Arguably, the tax exemption in the Indian Act is merely a codification of an Aboriginal or treaty right to immunity from taxation: see Richard H. Bartlett, Indians and Taxation in Canada, 3rd ed. (Saskatoon: Native Law Centre, 1992), at pp. 26-27. If so, it is arguable that the preservation of this immunity in the impugned by-laws may be protected from a Charter challenge under s. 15 by s. 25, which provides that the Charter shall not derogate from Aboriginal, treaty or other rights of Aboriginal peoples.
[105] [1985] 2 S.C.R. 486.
[106] Harel v. Dep. M. Rev. of Quebec, [1978] 1 S.C.R. 851, at p. 859 (per de Grandpré J.).
[107] An Act for the protection of the Indians in Upper Canada from imposition, and the property occupied or enjoyed by them from trespass and injury, S.C. 1850, c. 74, s. 4.
[108] Id., R.S.C., 1985, Appendix II, No. 1.
[109] See Bartlett, supra, note 105 at p. 26; and Canada Royal Commission on Aboriginal Peoples, Report of the Royal Commission on Aboriginal Peoples, Vol. 2 “Restructuring the Relationship” (Ottawa: Minister of Supply and Services Canada, 1996), at p. 291.
[110] See McClanahan v. Arizona State Tax Comm’n, 411 U.S. 164 (1973); and Bryan v. Itasca County, 426 U.S. 373 (1976). The latter decision of the U.S. Supreme Court was cited with approval by La Forest J. in Mitchell, supra, note 94. See also R. v. Sioui, [1990] 1 S.C.R. 1025; and Bartlett, supra, note 105, at pp. 23-26.