McDiarmid Lumber Ltd. v. God's Lake First Nation

McDiarmid Lumber Ltd. v. God's Lake First Nation
Collection
Supreme Court Judgments
Date
2006-12-15
Neutral citation
2006 SCC 58
Report
[2006] 2 SCR 846
Case number
30890
Judges
McLachlin, Beverley; Bastarache, Michel; Binnie, William Ian Corneil; LeBel, Louis; Deschamps, Marie; Fish, Morris J.; Abella, Rosalie Silberman; Charron, Louise; Rothstein, Marshall
On appeal from
Manitoba
Subjects
Aboriginal law
Notes
SCC Case Information: 30890
Decision Content
SUPREME COURT OF CANADA
Citation: McDiarmid Lumber Ltd. v. God’s Lake First Nation, [2006] 2 S.C.R. 846, 2006 SCC 58
Date: 20061215
Docket: 30890
Between:
God’s Lake First Nation a.k.a. God’s Lake Band
Appellant
and
McDiarmid Lumber Ltd.
Respondent
‑ and ‑
Attorney General of Canada, Assembly of First Nations
and Manitoba Keewatinook Ininew Okimowin
Interveners
Coram: McLachlin C.J. and Bastarache, Binnie, LeBel, Deschamps, Fish, Abella, Charron and Rothstein JJ.
Reasons for Judgment:
(paras. 1 to 76)
Dissenting Reasons:
(paras. 77 to 150)
McLachlin C.J. (Bastarache, LeBel, Deschamps, Charron and Rothstein JJ. concurring)
Binnie J. (Fish and Abella JJ. concurring)
______________________________
McDiarmid Lumber Ltd. v. God’s Lake First Nation, [2006] 2 S.C.R. 846, 2006 SCC 58
God’s Lake First Nation a.k.a. God’s Lake Band Appellant
v.
McDiarmid Lumber Ltd. Respondent
and
Attorney General of Canada,
Assembly of First Nations and
Manitoba Keewatinook Ininew Okimowin Interveners
Indexed as: McDiarmid Lumber Ltd. v. God’s Lake First Nation
Neutral citation: 2006 SCC 58.
File No.: 30890.
2006: April 20; 2006: December 15.
Present: McLachlin C.J. and Bastarache, Binnie, LeBel, Deschamps, Fish, Abella, Charron and Rothstein JJ.
on appeal from the court of appeal for manitoba
Aboriginal law — Property situated on reserve — Exemption from seizure — Creditor of Indian band attempting to garnish funds in off‑reserve financial institution — Funds paid to band by federal government pursuant to Comprehensive Funding Arrangement — Whether funds exempted from seizure by virtue of s. 89 or s. 90(1) (b) of Indian Act — Whether funds notionally “situated on a reserve” — Whether funds paid to band pursuant to “treaty or agreement” — Meaning of word “agreement” in s. 90(1) (b) of Indian Act — Indian Act, R.S.C. 1985, c. I‑5, ss. 89 , 90(1) (b).
The appellant Indian band resides on an isolated reserve in northern Manitoba. It has adhered to Treaty No. 5 with the federal government and, in exchange for the extinguishment of claims, the Crown agreed, inter alia, to provide annual grants and to maintain schools. The band is entirely funded by the federal government under a Comprehensive Funding Arrangement (“CFA”) pursuant to which funds for various programs are deposited monthly into the band’s account in a financial institution in Winnipeg. The respondent company sued the band to obtain payment for construction materials and services it had supplied for projects on the reserve. The parties entered into a consent judgment, but the band was unable to pay. The company served a notice of garnishment on the Winnipeg financial institution. The band moved to set aside the garnishment order on the ground that these were CFA funds that were exempt from seizure under ss. 89 or 90(1) (b) of the Indian Act . The Master released from garnishment the portion of those monies that he found were CFA funds, but set aside the sum of $125,000. The motions judge concluded that the CFA was an “agreement” under s. 90(1)(b) of the Act and that the funds were therefore “deemed always to be situated on a reserve” and were exempt from seizure. The Court of Appeal set aside that decision, holding that s. 89 did not apply, as the funds were not “situated on a reserve”, nor were they deemed to be situated on a reserve under s. 90 , because they were not paid pursuant to an agreement ancillary to Treaty No. 5.
Held (Binnie, Fish and Abella JJ. dissenting): The appeal should be dismissed.
Per McLachlin C.J. and Bastarache, LeBel, Deschamps, Charron and Rothstein JJ.: The CFA funds were not situated on a reserve, and the immunity from seizure granted by s. 89 of the Indian Act accordingly does not apply. The expression “situated on a reserve” in s. 89 is to be given its plain and ordinary meaning and is subject to common law and statutory situs rules. The location of the bank account is objectively easy to determine: it is located off‑reserve at the Winnipeg financial institution. This approach to interpretation is overwhelmingly supported in the case law and by the fact that when Parliament wished to depart from the physically situate test for personal property, it did so expressly, as in s. 90(1) (b) of the Indian Act , which suggests that other provisions of the Act addressing location should not be interpreted according to a “notional” test. [3] [11] [13] [18-21]
Section 90(1) (b) of the Indian Act does not extend the immunity from seizure to the CFA funds, because the band has not demonstrated that the disputed funding is protected by virtue of its relationship to treaty obligations. The word “agreement” in s. 90(1) (b) should not be construed broadly as extending to any agreement between the government and Indians that confers benefits or “public sector services” benefits, but should be confined to property that enures to Indians pursuant to agreements that are ancillary to, or that flesh out, treaty obligations of the Crown. [1] [25] [27] [73]
The history of s. 90(1) (b) supports a narrow interpretation of the word “agreement”. For decades, Parliament’s approach to Indian property was a paternalistic one under which virtually all property that could be traced to treaties with or gifts from the Crown was exempt from seizure. In 1951, Parliament revised the Indian Act , signalling an intention to encourage Indian entrepreneurship and self‑government. This new approach is consistent with an intention to confine protection from seizure to benefits flowing from treaties. To exempt property broadly would be inconsistent with self‑sufficiency, because it would deprive Indian communities of credit, which is a cornerstone of economic development. But to eliminate all protection would neglect the persistent concerns about exploitation. These potentially conflicting policy considerations suggest that Parliament wanted to provide limited protection for treaty entitlements while not interfering with the ability of Indians to achieve great economic independence. Given that our Constitution also grants a special place to treaty obligations, Parliament’s decision to distinguish between treaty and non‑treaty property in the statutory scheme is not one that the Court can or should disturb. [37] [40] [55] [66-67]
The rules of statutory interpretation also lead to the conclusion that the word “agreement” in s. 90(1) (b) must be interpreted narrowly. Pursuant to the “associated meaning” principle, which functions as an aid to ascertaining Parliament’s intention, the words “treaty” and “agreement”, being linked, take colour from one another, which limits the scope of the broader term “agreement” such that it is as supplementary to the narrower term “treaty”. Furthermore, it is presumed that Parliament avoids superfluous or meaningless words. If “agreement” were to be interpreted broadly to cover all types of agreements between Indians and the government, then the word “treaty” would have no role to play. Lastly, the word “agreement” in s. 90(1) (b) must be read narrowly, because the Indian Act ’s exemption provisions not only create limited exceptions to the general rule that the provincial credit regimes will apply to Indian property, but also limit the ability of aboriginal peoples to access credit, which is a significant deterrent to financing business activity on‑reserve. [31] [34‑39] [42]
Here, the record does not permit the Court to make a determination about the precise relationship between the CFA funds and the Crown’s treaty obligations. The CFA funds in the case at bar are blended, and if parts of them relate to treaty obligations, they have not been segregated by either the Crown or the band. While any portion of the CFA funds that flows directly from treaty obligations is entitled to protection under s. 90(1) (b), the band has failed to discharge its onus to establish the connection between funds it claims were protected and the Crown’s treaty obligations. [76]
Per Binnie, Fish and Abella JJ. (dissenting): The CFA between the band and the Crown is a “treaty or agreement” pursuant to s. 90(1) (b) of the Indian Act so that funds flowing to the band under the CFA should be exempt from garnishment. Because the CFA is an agreement to provide on‑reserve essential public services, s. 90(1) (b) places those CFA funds given by the federal Crown to a band under ss. 87 and 89 protection. Without this protection, seizure of CFA monies would inevitably impair the band’s capacity to deliver these essential services to its members. Section 90(1) (b) also protects the interest of taxpayers in ensuring that funds transferred by Parliament to a band for housing, education, infrastructure, health and welfare, are used for the designated purposes, and not, as here, diverted to other purposes chosen by the band. [77] [79] [83] [87]
The outcome of the appeal turns on whether s. 90(1) (b) truly requires the CFA to be “ancillary” to a “treaty” at all. While the word “agreement” in s. 90(1) (b) draws its meaning from context, that context has little to do with treaties, but rather forms part of a larger legislative initiative taken to protect and encourage the survival of reserves as liveable communities and to ensure that public monies “given” to an Indian band for essential public services on the reserve are used for the intended purposes. Only a purposeful as opposed to restrictive reading of s. 90(1) (b) will accomplish that objective. If a narrow interpretation of s. 90(1) (b) is adopted, only the more economically developed bands served on the reserve by a deposit-taking financial institution will paradoxically receive their CFA funds free from the threat of attachment and execution. [81] [90] [108] [134] [141]
Section 90(1)(b) should apply as much to bands dispossessed of their traditional lands without a treaty as to those with whom treaties were made. CFAs for education, housing, health and welfare are intimately linked to enabling Indians to continue on their lands and are in the nature of government to government transfer payments. The purpose of these agreements is to provide the same essential services to Aboriginal communities as are provided to other Canadians by their provincial, territorial and municipal governments. If s. 90(1)(b) is narrowly construed to cover only funds transferred to Indian bands by the federal Crown pursuant to agreements that “flesh out” treaty terms, bands without treaties would not obtain the same protection from attachment and seizure as treaty bands. This would mean that s. 90(1)(b) would operate inequitably among bands in relation to the same types of CFA funding for the same essential on‑reserve services. Such a lack of equity ought not to be attributed to Parliamentary intent in the absence of very clear language. In addition, even among the treaties, the enumerated benefits vary greatly and it should not be concluded that Parliament intended that monies could be garnisheed in the case of some Indian reserves but not others. To the extent the exemption in s. 90 is seen as part of the purchase price for the cession of land, it makes little difference to the dispossessed whether dispossession occurred by agreement or not. The narrow interpretation of s. 90(1)(b) would result in a checkerboard of exemptions and non-exemptions across the country determined by the vagaries of the treaty‑ making process rather than rational legislative policy. [95] [103] [106] [116] [121] [123‑124] [128]
The expenditures of the appellant band council show that its spending priorities are different from the CFA priorities. If the garnishee is successful there will not be enough CFA money left to pay for essential public services. This means either band members will live in the “third world conditions” described in the Report of the Royal Commission on Aboriginal Peoples (1996) (“RCAP”), or the federal government will step in at some stage to fund the delivery of the essential services it had already funded under the CFA but which funds were diverted to other priorities determined by the band council. The first alternative is to perpetuate what RCAP calls a national embarrassment. The other alternative is for the public to pay twice. Neither is palatable public policy. Parliament cannot have intended an interpretation of s. 90(1)(b) that creates such a Hobson’s choice. [85] [149]
A public sector services funding approach, which would exclude commercial dealings but include CFA funds provided by the federal government for health, education, housing, welfare and infrastructure, is consistent with the text, context and purpose of the relevant provisions of the Indian Act for the following reasons. Firstly, the text of s. 90(1) (b) does not qualify the term “agreement” but is part of a legislative package which bears the impress of the Crown’s obligations to native peoples generally. Secondly, the suggested approach would avoid tying the exemption to the historical anomalies created by the treaty‑making process. Thirdly, it puts the focus on the reserve where the needs of the band are to be met rather than on where the federal funds voted by Parliament for that purpose happen to be on deposit — in this case, off‑reserve. Fourthly, it avoids differential treatment of CFA funds depending on whether the band is rich enough to attract to its reserve a branch of a deposit‑taking financial institution. [132‑133] [135‑139]
To impose an onus on the band to prove which parts of CFA funding on deposit at any particular time “flesh out” treaty commitments of the Crown and which parts of CFA funding do not, is a burden they cannot discharge, given the deposit of blended monthly payments which are not segregated on a project by project basis. The objective of predictability and certainty in economic relations between First Nations and non‑aboriginal people is better served by a categorical denial of execution and garnishment of CFA funds whether those funds are parked at a financial institution on or off the reserve. [145‑146]
Cases Cited
By McLachlin C.J.
Applied: Mitchell v. Peguis Indian Band, [1990] 2 S.C.R. 85; R. v. Lewis, [1996] 1 S.C.R. 921; distinguished: Williams v. Canada, [1992] 1 S.C.R. 877; referred to: Union of New Brunswick Indians v. New Brunswick (Minister of Finance), [1998] 1 S.C.R. 1161; R. v. Chaulk, [1990] 3 S.C.R. 1303; R. v. B. (K.G.), [1993] 1 S.C.R. 740; Friedmann Equity Developments Inc. v. Final Note Ltd., [2000] 1 S.C.R. 842, 2000 SCC 34; 2747‑3174 Québec Inc. v. Quebec (Régie des permis d’alcool), [1996] 3 S.C.R. 919; Marche v. Halifax Insurance Co., [2005] 1 S.C.R. 47, 2005 SCC 6; Ontario v. Canadian Pacific Ltd., [1995] 2 S.C.R. 1031; R. v. Goulis (1981), 33 O.R. (2d) 55; R. v. McCraw, [1991] 3 S.C.R. 72.
By Binnie J. (dissenting)
Mitchell v. Peguis Indian Band, [1990] 2 S.C.R. 85; Nowegijick v. The Queen, [1983] 1 S.C.R. 29; Sturgeon Lake Indian Band v. Tomporowski Architectural Group Ltd. (1991), 95 Sask. R. 302; Royal Bank of Canada v. White Bear Indian Band, [1992] 1 C.N.L.R. 174; Young v. Wolf Lake Indian Band (1999), 164 F.T.R. 123; R. v. Marshall, [1999] 3 S.C.R. 456; Greyeyes v. The Queen, [1978] 2 F.C. 385; Ontario (Attorney General) v. Bear Island Foundation, [1991] 2 S.C.R. 570, aff’g (1989), 58 D.L.R. (4th) 117, aff’g (1984), 15 D.L.R. (4th) 321; R. v. White and Bob (1964), 50 D.L.R. (2d) 613, aff’d [1965] S.C.R. vi; Peace Hills Trust Co. v. Moccasin (2005), 281 F.T.R. 201, 2005 FC 1364; Lovelace v. Ontario, [2000] 1 S.C.R. 950, 2000 SCC 37.
Statutes and Regulations Cited
An Act for the gradual enfranchisement of Indians, the better management of Indian affairs, and to extend the provisions of the Act 31st Victoria, Chapter 42, S.C. 1869, c. 6.
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. Prov. C. 1850, 13 & 14 Vict., c. 74, s. VIII.
An Act providing for the organisation of the Department of the Secretary of State of Canada, and for the management of Indian and Ord[i]nance Lands, S.C. 1868, c. 42.
An Act to amend the Indian Act, S.C. 1906, c. 20.
An Act to amend the Indian Act, S.C. 1938, c. 31, s. 2.
Constitution Act, 1867, s. 91(24) .
Constitution Act, 1982, s. 35(3) .
Financial Administration Act, R.S.C. 1985, c. F‑11, ss. 32 , 34 .
Indian Act, R.S.C. 1886, c. 43.
Indian Act , R.S.C. 1927, c. 98, ss. 94B , 108 .
Indian Act, R.S.C. 1985, c. I‑5, ss. 87 , 88 , 89 , 90 .
Indian Act, S.C. 1951, c. 29, ss. 88, 89.
Indian Act, 1876, S.C. 1876, c. 18.
Indian Act, 1880, S.C. 1880, c. 28.
Trust and Loan Companies Act, S.C. 1991, c. 45 .
Treaties and Proclamation
Royal Proclamation (1763), R.S.C. 1985, App. II, No. 1.
Treaty No. 5 (1875).
Treaty No. 6 (1876).
Authors Cited
Canada. House of Commons. House of Commons Debates, vol. II, 4th Sess., 21st Parl., March 16, 1951, p. 1352.
Canada. House of Commons. House of Commons Debates, vol. III, 3rd Sess., 18th Parl., May 30, 1938, pp. 3349‑50.
Canada. House of Commons. House of Commons Debates, vol. 135, No. 176, 1st Sess., 36th Parl., February 8, 1999, p. 11602.
Canada. Indian Affairs and Northern Development. Gathering Strength — Canada’s Aboriginal Action Plan. Ottawa: Minister of Public Works and Government Services Canada, 1997.
Canada. Indian Affairs and Northern Development. Gathering Strength — Canada’s Aboriginal Action Plan: A Progress Report. Ottawa: Minister of Public Works and Government Services Canada, 2000.
Canada. Indian and Northern Affairs. Treaties and Historical Research Centre. The Historical Development of the Indian Act, 2nd ed. by Robert G. Moore. Ottawa: The Centre, 1978.
Canada. Royal Commission on Aboriginal Peoples. Report of the Royal Commission on Aboriginal Peoples, vol. 2, Restructuring the Relationship, vol. 3, Gathering Strength. Ottawa: The Commission, 1996.
Canada. Special Joint Committee of the Senate and the House of Commons on the Indian Act . Minutes of Proceedings and Evidence, Issue No. 5, p. 187, Fourth Report, June 22, 1948.
Morris, Alexander. The Treaties of Canada with the Indians of Manitoba and the North‑West Territories, Including the Negotiations on which They were Based, and Other Information Related Thereto. Toronto: Prospero Books, 2000, reprint of 1880 edition.
Sullivan, Ruth. Sullivan and Driedger on the Construction of Statutes, 4th ed. Markham: Butterworths, 2002.
APPEAL from a judgment of the Manitoba Court of Appeal (Scott C.J.M. and Philp and Hamilton JJ.A.) (2005), 192 Man. R. (2d) 82, 340 W.A.C. 82, 251 D.L.R. (4th) 93, 8 C.B.R. (5th) 244, 50 C.L.R. (3d) 17, [2005] 2 C.N.L.R. 155, [2006] 1 W.W.R. 486, [2005] M.J. No. 29 (QL), 2005 MBCA 22, allowing an appeal from a decision of Sinclair J. (2004), 186 Man. R. (2d) 31, [2004] 3 C.N.L.R. 192, [2004] M.J. No. 281 (QL), 2004 MBQB 156, dismissing an appeal against an order issued by Senior Master Lee. Appeal dismissed, Binnie, Fish and Abella JJ. dissenting.
George J. Orle, Q.C., and Daryl A. Chicoine, for the appellant.
James A. Mercury and Betty A. Johnstone, for the respondent.
Graham R. Garton, Q.C., and John S. Tyhurst, for the intervener the Attorney General of Canada.
Jack R. London, Q.C., and Bryan P. Schwartz, for the intervener the Assembly of First Nations.
P. Michael Jerch and Louis Harper, for the intervener Manitoba Keewatinook Ininew Okimowin.
The judgment of McLachlin C.J. and Bastarache, LeBel, Deschamps, Charron and Rothstein JJ. was delivered by
The Chief Justice —
1. Introduction
1 The appeal concerns the scope of ss. 89 and 90 of the Indian Act, R.S.C. 1985, c. I-5 . These provisions, designed to prevent the erosion of property belonging to Indians qua Indians, confer immunity from seizure by creditors. The question on this appeal is whether ss. 89 and 90 extend this immunity to funds provided under individualized Comprehensive Funding Arrangements (“CFAs”) between the federal government and aboriginal bands.
2 The case at bar involves band funds that have been deposited in an off-reserve account pursuant to a CFA between the God’s Lake Band and the federal government. As part of a “co-management” approach to governance, the CFA funds are designed to be spent exclusively for certain designated purposes. One of these purposes — namely, on-reserve education — appears closely related to the Crown’s obligations under Treaty No. 5 (1875), to which the band adhered in 1909. Others seem only indirectly related to such obligations. Still others seem to fall entirely outside the treaty obligations. The respondent, a creditor of the band that has obtained a consent judgment and garnishment order, is seeking to seize the funds.
3 I conclude that the funds in question are not protected directly by s. 89 of the Indian Act , which protects only property situated on a reserve. Nor, in my opinion, did the band discharge its burden of establishing protection under s. 90(1) , which immunizes from seizure funds given “under a treaty or agreement”. Accordingly, I would dismiss the appeal.
2. Issues
4 The appeal raises two issues:
1. How should the location of a banking debt be determined for the purposes of s. 89(1)? Is the debt protected because it is notionally on reserve?
2. Do the words “personal property . . . given to Indians or to a band under a treaty or agreement between a band and Her Majesty” in s. 90(1)(b) apply to the funds provided under the CFA in the case at bar?
3. The Statute
5 Under s. 89 of the Indian Act , property situated on a reserve is protected from seizure. Under s. 90, other property may be deemed to be so situated for the purposes of taxation or seizure. The provisions read:
89. (1) Subject to this Act, the real and personal property of an Indian or a band situated on a reserve is not subject to charge, pledge, mortgage, attachment, levy, seizure, distress or execution in favour or at the instance of any person other than an Indian or a band.
(1.1) Notwithstanding subsection (1), a leasehold interest in designated lands is subject to charge, pledge, mortgage, attachment, levy, seizure, distress and execution.
(2) A person who sells to a band or a member of a band a chattel under an agreement whereby the right of property or right of possession thereto remains wholly or in part in the seller may exercise his rights under the agreement notwithstanding that the chattel is situated on a reserve.
90. (1) For the purposes of sections 87 and 89 , personal property that was
(a) purchased by Her Majesty with Indian moneys or moneys appropriated by Parliament for the use and benefit of Indians or bands, or
(b) given to Indians or to a band under a treaty or agreement between a band and Her Majesty,
shall be deemed always to be situated on a reserve.
The provisions were initially adopted, in almost identical form, as ss. 88 and 89 in the Indian Act reforms of 1951 (S.C. 1951, c. 29).
4. Judicial History
6 Senior Master Lee of the Court of Queen’s Bench of Manitoba found that there was a strong likelihood that some of, if not all, the attached monies had been received pursuant to a CFA. He stated that the monies were for essential services on the reserve and were “clearly in keeping with the public policy behind the development of the protection afforded pursuant to ss. 89 and 90 of The Indian Act ”. He rejected arguments regarding situs under the Trust and Loan Companies Act, S.C. 1991, c. 45 . After verification of the portion of the monies received under the CFA, Senior Master Lee ordered $518,838.55 released from garnishment. $125,000 was set aside pending the resolution of the issues before us.
7 On appeal, Sinclair J. of the Court of Queen’s Bench first asked whether the funds were “property situated on a reserve” and thus protected from seizure by s. 89 of the Indian Act . He rejected the common law natural meaning approach to situs in favour of a connecting factors test aimed at identifying a discernible nexus between the property in question and the Indian occupation of reserve land. He identified and considered seven factors: the nature of the CFA; the purpose of the funds provided; the location of the recipient band under the CFA; the location of the account into which the funds were deposited; the location of expenditures from the fund; the intended beneficiaries or recipients of payment from the fund; and the importance of the fund to the band’s ability to occupy the reserve. Sinclair J. concluded that the funds constituted Indian property closely related to Indian occupation of reserve land and that they ought to be protected from seizure. He held:
. . . I am satisfied that there is more than a discernable nexus between the funds and the Band’s ability to occupy its reserve. The connecting factors in this case are quite strong. That causes me to conclude that the funds are protected from seizure pursuant to s. 89 of the Indian Act regardless of s. 90 .
((2004), 186 Man. R. (2d) 31, 2004 MBQB 156, at para. 83)
Sinclair J. went on to consider whether the funds were also protected by s. 90 of the Indian Act . He concluded that the CFA was an “agreement” within the meaning of s. 90 , rejecting the view expressed in Mitchell v. Peguis Indian Band, [1990] 2 S.C.R. 85, at pp. 134-42, per La Forest J., that for an agreement to come within s. 90 , it must be connected to a treaty. Turning to the CFA at issue, Sinclair J. found that
while it seems clear that the agreement between the Band and Canada was intended in part to allow Canada to fulfill its treaty obligations (for health and education for example), for the most part, the CFA covers areas of funding not mentioned in Treaty No. 5. [para. 87]
Being unable to say what portion of the CFA related to the treaty obligation made “no difference” given the broad meaning he accorded to the word “agreement” in s. 90 . He concluded:
I am of the view that the CFA reflects the federal government’s responsibilities for Indians and lands reserved for Indians under s. 91(24) of the Constitution Act 1867 . Such an agreement, therefore, is covered by s. 90 of the Indian Act . As such, the funds deposited in the Band’s bank account at Peace Hills were deemed always to be situated on an Indian Reserve and therefore not attachable. [para. 87]
8 The Manitoba Court of Appeal, per Scott C.J.M. and Philp J.A., allowed the appeal, finding that neither s. 89 nor s. 90 of the Indian Act applied to the garnished funds: (2005), 192 Man. R. (2d) 82, 2005 MBCA 22. On s. 89, the court rejected the view that the CFA funds received by the band and deposited in the Winnipeg bank were personal property situated on a reserve. The court held that the motions judge had erred in applying a multi-factored “discernible nexus” test to determine whether the property was on the reserve, and in his evaluation of the factors that tied the band’s accounts to the reserve. While the provisions of the Act were to be liberally interpreted in favour of Indians, Union of New Brunswick Indians v. New Brunswick (Minister of Finance), [1998] 1 S.C.R. 1161, at paras. 13-15, made clear that the words “situated on a reserve” in s. 87 should be given their ordinary and common sense meaning and that they do not include “notional situation” on a reserve. The only notional situs of personal property for the purposes of ss. 87 and 89 was found in the statutory deeming provisions of s. 90 .
9 After reviewing the case law, the court determined that it would be inappropriate to apply a highly contextual test to determine the situs of personal property that may be subject to seizure. Even if such a test were applied, however, Scott C.J.M. and Philp J.A. found that the location of the funds in Winnipeg would be determinative:
We conclude, as did Côté, J.A., in the Enoch Indian Band decision, that whether one applies the common law situs principles or the Williams connecting factors test, the funds on deposit at Peace Hills were not property situated on a reserve. The funds were not exempt from garnishment by the plaintiff by virtue of s. 89 of the Act. [para. 91]
10 The court then turned to s. 90 . It held that the governing authority was Mitchell, which restricted the scope of s. 90(1)(b) to personal property that enures to Indians through the discharge by Her Majesty of her treaty or ancillary obligations. It followed that the motions judge’s broad reading of “agreement” in s. 90 was untenable. The only question was whether the CFA was ancillary to Treaty No. 5. The court noted that the CFA, for the most part, dealt with areas not covered by Treaty No. 5. There was “no evidence that established an explicit connection between the band’s treaty rights and the CFA” (para. 126), and the importance of the funds to the band’s viability did not change the agreement’s nature.
5. Analysis
5.1 Determining Location Under Section 89(1)
11 Section 89(1) of the Indian Act provides that “the real and personal property of an Indian or a band situated on a reserve is not subject to charge, pledge, mortgage, attachment, levy, seizure, distress or execution in favour or at the instance of any person other than an Indian or a band”. The question is whether the expression “situated on a reserve” is to be given its plain meaning and subjected to the common law and statutory situs rules, or whether it has a more abstract meaning unique to the Indian Act .
12 The band relies on Williams v. Canada, [1992] 1 S.C.R. 877. In that case, the issue was whether unemployment insurance benefits received by an Indian were “situated” on the reserve for the purposes of exemption from taxation under the Indian Act . The Court, per Gonthier J., found that the situs for this purpose was on the reserve, having regard to “a number of potentially relevant connecting factors” relating to the transaction and the parties involved (p. 893). Gonthier J., in obiter, suggested that the same approach would apply to seizures.
13 There is no dispute that under traditional common law approaches and the terms of the Trust and Loan Companies Act , the debt at issue here is located off-reserve at the Winnipeg bank branch. The question, therefore, is what approach applies to seizures — the concrete approach of the common law, or the multi-factored notional approach applied to taxation in Williams.
14 The band argues that the Williams approach better reflects the broader purpose of this protective provision of the Indian Act . That purpose, it submits, is to protect assets of Indians qua Indians where to permit seizure would neglect the realities of the aboriginal community in question or the options available to the parties. This is particularly true, the band contends, if a link to on-reserve activities is established.
15 Despite its evident appeal, this submission does not withstand scrutiny. Principle, policy and jurisprudence stand against it.
16 First, Williams is distinguishable. It was based on a different section of the Indian Act and referred to a different kind of property. At issue was s. 87 , which accords an exemption from taxation for “personal property of an Indian or a band situated on a reserve”. The exemption was permitted in Williams, because “the benefits, intangible personal property, were effectively on the reserve at the time of taxation”: Union of New Brunswick Indians, at para. 12 (emphasis added).
17 As Scott C.J.M. and Philp J.A. note, the Court in Williams used a “connecting factors” approach to determine the location of “something that is neither tangible personal property nor a chose in action” (para. 59). It makes sense to adopt a highly fact-specific form of analysis with respect to the location of a transaction, such as the provision of benefits, for taxation purposes. In this case, however, as Scott C.J.M. and Philp J.A. point out:
[W]e are not concerned with where a transaction is located for the purposes of taxation. We are concerned with the garnishment of the band’s funds that are deposited in bank accounts at the Winnipeg branch of Peace Hills. The law is well settled that a bank deposit constitutes a debt owing by the bank to its customer. Gonthier, J., reasoned in Williams, it is “not apparent how the place where a debt may normally be enforced has any relevance to the question whether to tax . . . would amount to the erosion of the entitlements of an Indian . . .”. On the other hand, the place where a debt may be enforced has everything to do with the seizure of a debt. [Emphasis added; para. 60.]
18 Adopting the contextual form of analysis developed for cases — such as one involving a taxation transaction — where the location is objectively difficult to determine does not mean that the ordinary sense of “location” should be changed where — as is true of the bank account in the case at bar — the location is objectively easy to determine.
19 Second, the cases overwhelmingly support a concrete common law interpretation. In Union of New Brunswick Indians, writing for the majority of this Court, I confirmed the view of Iacobucci J. in R. v. Lewis, [1996] 1 S.C.R. 921, that “on the reserve” is to be given “its ordinary and common sense” meaning throughout the Indian Act :
The Court had earlier stated at p. 955 [of Lewis] that the phrase should be given the same construction wherever it is used throughout the Indian Act . The phrase “situated on a reserve” should be interpreted in the same way. The addition of the word “situated” does not significantly alter the meaning of the phrase in the circumstances of this case . . . .
The only qualification the case law admits to the rule that s. 87 catches only property physically located on a reserve is the rule that where property which was on a reserve moves off the reserve temporarily, the court will ask whether its “paramount location” is on the reserve. [paras. 13-14]
The Court of Appeal in the case at bar found this statement to have “foreclosed the existence of a discernible nexus test that would modify the requirement of s. 87 (and of s. 89) that property must be physically located on a reserve” (para. 34). I agree.
20 Third, this view is supported by the fact that when Parliament wished to depart from the physically situate test for personal property, it did so expressly by statutory language. Thus, s. 90 provides that personal property given to Indians by the Crown under treaty obligations or purchased by moneys appropriated by Parliament for the benefit of Indians “shall be deemed always to be situated on a reserve”. The existence of a deeming provision of this kind suggests that other provisions addressing location should not be interpreted according to a “notional” test.
21 I agree with the Court of Appeal that the funds in the Winnipeg bank account were not “situated on a reserve”. Accordingly, the exemption granted by s. 89 of the Indian Act does not apply.
5.2 The Exemption Under Section 90(1) of the Indian Act
22 Section 90(1) of the Indian Act reads as follows:
90. (1) For the purposes of sections 87 and 89 , personal property that was
(a) purchased by Her Majesty with Indian moneys or moneys appropriated by Parliament for the use and benefit of Indians or bands, or
(b) given to Indians or to a band under a treaty or agreement between a band and Her Majesty,
shall be deemed always to be situated on a reserve.
Is the deposited money at issue in this case covered by this deeming provision, and thus protected from garnishment, because of its source in an “agreement” with the Crown?
23 The appellant band is a 1909 adherent to Treaty No. 5, concluded at Norway House in 1875. In exchange for the extinguishment of claims, the Crown agreed, inter alia, to protect traditional activities on the surrendered land, provide annual grants, and maintain schools. In the case at bar, the funds in question were provided through a CFA under which funds are to be delivered to the band’s off-reserve bank account on a monthly basis. The motions judge found that the band has “almost no independent sources of funding for its financial needs other than those provided by the federal government” (para. 5). The parties disagree about both the proper interpretation of the word “agreement” in s. 90(1) and the proper characterization of the CFA.
24 The question is one of statutory interpretation. What is the meaning of “agreement” in s. 90(1) (b)? Does it extend to any agreement between the government and an Indian band? Or is it confined to particular types of agreements, and if so, what types of agreements?
25 Precedent, principle and policy all suggest that Parliament’s intent was that the word “agreement” in s. 90(1) (b) should not be accorded a broad meaning, but should instead be confined to agreements ancillary to treaties.
5.2.1 Precedent
26 This Court has already considered the meaning of “agreement” in s. 90(1) (b) and concluded that it should be restricted to agreements that flesh out commitments of the Crown to Indians in the treaty context of the surrender of their homelands: Mitchell, at pp. 124, 131 and 134. The band would have us overrule Mitchell. It is not the practice of this Court to reverse its previous decisions in the absence of compelling reasons to do so: R. v. Chaulk, [1990] 3 S.C.R. 1303, at pp. 1352‑53; R. v. B. (K.G.), [1993] 1 S.C.R. 740, at pp. 777‑78; Friedmann Equity Developments Inc. v. Final Note Ltd., [2000] 1 S.C.R. 842, 2000 SCC 34, at para. 43. In this case, as will be discussed more fully below, no such reasons emerge. On the contrary, Mitchell appears to have been correctly decided.
27 The Court confirmed in Williams that the purpose of the exemptions in ss. 87 , 88 and 89 of the Indian Act “was 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 governments to tax, or creditors to seize” (p. 885). The purpose is to protect what the Indian band was “given” in return for the surrender of Indian lands. The exemptions are tied to the reserve lands and the Indians’ ability to preserve their lands against outside intrusion and diminishment. As Gonthier J. stated in Williams, “the purpose of the sections was not to confer a general economic benefit upon the Indians” (p. 885). For example, they do not exempt from seizure or taxation contractual arrangements in the commercial mainstream that amount to normal business transactions, but only “property that enures to Indians pursuant to treaties and their ancillary agreements”: Mitchell, at p. 138. Only the latter is protected by s. 90(1) (b).
28 To achieve this purpose, Parliament sought to ensure that the entitlements of Indians under treaties were not defined in a way that was unduly narrow or technical. La Forest J. reasoned that “[i]t must be remembered that treaty promises are often couched in very general terms and that supplementary agreements are needed to flesh out the details of the commitments undertaken by the Crown”: Mitchell, at p. 124. The word “agreement” in the provision thus served to ensure that agreements that fulfil treaty obligations are treated as such.
29 In reaching this conclusion, the Court relied on the principle of associated meaning, discussed more fully below. Although La Forest J. did not refer to that principle expressly, he used the vocabulary traditionally associated with it and determined that “the terms ‘treaty’ and ‘agreement’ in s. 90(1) (b) take colour from one another”: Mitchell, at p. 124.
5.2.2 The Principle of Associated Meaning
30 It is a fundamental principle of statutory interpretation that when two or