Anderson v. Alberta

Anderson v. Alberta
Collection
Supreme Court Judgments
Date
2022-03-18
Neutral citation
2022 SCC 6
Report
[2022] 1 SCR 29
Case number
39323
Judges
Wagner, Richard; Moldaver, Michael J.; Karakatsanis, Andromache; Côté, Suzanne; Brown, Russell; Rowe, Malcolm; Martin, Sheilah; Kasirer, Nicholas; Jamal, Mahmud
On appeal from
Alberta
Subjects
Civil procedure
Notes
Case in Brief SCC Case Information
Decision Content
SUPREME COURT OF CANADA
Citation: Anderson v. Alberta, 2022 SCC 6, [2022] 1 S.C.R. 29
Appeal Heard: November 4, 2021 Judgment Rendered: March 18, 2022 Docket: 39323
Between:
Germaine Anderson on her own behalf and on behalf of all other Beaver Lake Cree Nation beneficiaries of Treaty No. 6 and of Beaver Lake Cree Nation Appellant
and
Her Majesty The Queen in Right of the Province of Alberta and Attorney General of Canada Respondents
- and -
Attorney General of British Columbia, Alberta Prison Justice Society, Chiefs of Ontario, Advocates’ Society, Assembly of Manitoba Chiefs, Indigenous Bar Association in Canada, Treaty 8 First Nations of Alberta, Ecojustice Canada Society and Anishinabek Nation Interveners
Coram: Wagner C.J. and Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin, Kasirer and Jamal JJ.
Joint Reasons for Judgment: (paras. 1 to 74)
Karakatsanis and Brown JJ. (Wagner C.J. and Moldaver, Côté, Rowe, Martin, Kasirer and Jamal JJ. concurring)
Germaine Anderson on her own behalf and on behalf of all other
Beaver Lake Cree Nation beneficiaries of Treaty No. 6 and
of Beaver Lake Cree Nation Appellant
v.
Her Majesty The Queen in Right of the Province of Alberta and
Attorney General of Canada Respondents
and
Attorney General of British Columbia,
Alberta Prison Justice Society,
Chiefs of Ontario,
Advocates’ Society,
Assembly of Manitoba Chiefs,
Indigenous Bar Association in Canada,
Treaty 8 First Nations of Alberta,
Ecojustice Canada Society and
Anishinabek Nation Interveners
Indexed as: Anderson v. Alberta
2022 SCC 6
File No.: 39323.
2021: November 4; 2022: March 18.
Present: Wagner C.J. and Moldaver, Karakatsanis, Côté, Brown, Rowe, Martin, Kasirer and Jamal JJ.
on appeal from the court of appeal fo alberta
Civil procedure — Costs — Advance costs — Requirement of impecuniosity — First Nation government applying for advance costs to fund litigation concerning treaty rights — Whether impecuniosity requirement can be met where applicant has access to financial resources that could fund litigation but claims that it must devote resources to other priorities.
Beaver Lake Cree Nation is a First Nation band whose members are beneficiaries of Treaty No. 6. In 2008, Beaver Lake sued the Crown for having improperly allowed its lands to be taken up for industrial and resource development. A 120‑day trial is scheduled to begin in January 2024. Beaver Lake says that the cost of litigation — estimated at $5 million — is well beyond its reach. It therefore brought an application for advance costs to fund its litigation.
Under the impecuniosity branch of the advance costs test, Beaver Lake contends that even though it has access to resources that could potentially fund the litigation, these resources must be applied to address other priorities, such as substantial deficits in housing and infrastructure and high levels of unemployment and social assistance. The case management judge held that Beaver Lake was impecunious and awarded it advance costs. The Court of Appeal set aside the order for advance costs, holding that there was insufficient evidence to support a finding of impecuniosity and that it was an error in principle to conclude that Beaver Lake was impecunious when it had financial resources but chose to spend them on other priorities.
Held: The appeal should be allowed.
A First Nation government that has access to resources that could fund litigation may meet the impecuniosity requirement if it demonstrates that it requires such resources to meet its pressing needs. Pressing needs are not defined by the bare necessities of life. Rather, and in keeping with the imperative of reconciliation, they ought to be understood from the perspective of that First Nation government. Accordingly, in appropriate cases, a First Nation government may succeed in demonstrating impecuniosity despite having access to resources whose value equals or exceeds its litigation costs. In the instant case, the case management judge’s findings were insufficient to conclude that Beaver Lake had satisfied the legal test for impecuniosity and the record before her was itself insufficient to support such findings. Beaver Lake’s application for advance costs must be remitted for a new hearing.
The test for advance costs is rigorous since courts must be mindful of the constraints of their institutional role. Three absolute requirements must be satisfied: impecuniosity, a prima facie meritorious case, and issues of public importance. The concept of necessity is captured by the Court’s direction that advance costs are to be ordered as a last resort, where the First Nation government genuinely cannot afford the litigation and where it is impossible to proceed with the litigation without such costs. It is open to a court to decide that a First Nation government is impecunious when its prioritization of pressing needs, properly understood, has left it unable to fund public interest litigation. This approach is sufficiently flexible to account for the realities facing First Nations governments and the importance of furthering the goal of reconciliation. A court must consider the broader context in which a First Nation government makes financial decisions, including its competing spending commitments, restrictions on the uses of its resources, and fiduciary and good governance obligations. A First Nation government may genuinely need to allocate some or all of its resources to priorities other than litigation.
The court’s analysis must be firmly grounded in the evidence and detailed proof may be required to ensure accountability over the expenditure of public funds. The court must be able to (1) identify the applicant’s pressing needs; (2) determine what resources are required to meet those needs; (3) assess the applicant’s financial resources; and (4) identify the estimated costs of funding the litigation.
The pressing needs of a First Nation should be considered from the perspective of its government that sets its priorities and is best situated to identify its needs. This will always be a fact‑specific determination. There can be no question that expenditures on basic necessities of life, including adequate housing, a safe water supply, and basic health and education services, rise to the level of a pressing need. Spending to improve standards of living, for example, to provide enhanced health and education services or to promote cultural survival, may also qualify. A court identifying the pressing needs of a First Nation government may have regard to what that government has prioritized in the past. As well, in the context of the advance costs test, judicial notice may be taken of the systemic and background factors affecting Indigenous peoples in Canadian society, insofar as they may be relevant to understanding a First Nation government’s financial situation and spending priorities.
An applicant should adduce evidence of the costs of meeting its pressing needs and the extent to which it cannot cover those costs. The amount of detail required will depend on the circumstances, including the nature of the unmet needs and any difficulties in estimating the costs of those needs. Where a First Nation government applicant has extensive assets and ongoing revenue, more detailed evidence of its financial resources is required to demonstrate impecuniosity. Conversely, in some cases, a finding of impecuniosity can be made even where the applicant does not adduce detailed evidence, either because the applicant does not have any available financial resources, or because it is obvious that its resources would be outstripped by its pressing needs.
Where an applicant has access to financial resources that could potentially be used to pay for the litigation, it bears the onus of proving that it genuinely cannot afford to pay for the litigation because it must commit those resources to address other pressing needs, and it must demonstrate that those resources are in fact being devoted to addressing those pressing needs. In all cases, because advance costs are a matter of last resort, an applicant must demonstrate that it made sufficient efforts to obtain funding from alternate sources. An applicant must also submit an up‑to‑date litigation plan so that a court can know, at least approximately, the cost of pursuing the litigation. Ultimately, after assessing the financial resources available to a First Nation government applicant, the extent to which it must commit those resources to pressing needs in priority to the litigation and the estimated cost of the litigation, a determination can be made regarding whether the applicant has surplus resources with which it may finance the litigation in whole or in part.
Cases Cited
Applied: British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 S.C.R. 371; Little Sisters Book and Art Emporium v. Canada (Commissioner of Customs and Revenue), 2007 SCC 2, [2007] 1 S.C.R. 38; considered: R. v. Caron, 2011 SCC 5, [2011] 1 S.C.R. 78; Keewatin v. Ontario (Minister of Natural Resources) (2006), 32 C.P.C. (6th) 258; Missanabic Cree First Nation v. Ontario, 2011 ONSC 5196, 38 C.P.C. (7th) 385; Hagwilget Indian Band v. Canada (Minister of Indian Affairs and Northern Development), 2008 FC 574, [2008] 3 C.N.L.R. 136; referred to: Trial Lawyers Association of British Columbia v. British Columbia (Attorney General), 2014 SCC 59, [2014] 3 S.C.R. 31; B.C.G.E.U. v. British Columbia (Attorney General), [1988] 2 S.C.R. 214; Ontario v. Criminal Lawyers’ Association of Ontario, 2013 SCC 43, [2013] 3 S.C.R. 3; New Brunswick Broadcasting Co. v. Nova Scotia (Speaker of the House of Assembly), [1993] 1 S.C.R. 319; St‑Arnaud v. C.L., 2009 QCCA 97; Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73, [2004] 3 S.C.R. 511; Taku River Tlingit First Nation v. British Columbia (Project Assessment Director), 2004 SCC 74, [2004] 3 S.C.R. 550; Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage), 2005 SCC 69, [2005] 3 S.C.R. 388; Newfoundland and Labrador (Attorney General) v. Uashaunnuat (Innu of Uashat and of Mani‑Utenam), 2020 SCC 4, [2020] 1 S.C.R. 15; R. v. Desautel, 2021 SCC 17, [2021] 1 S.C.R. 533; First Nation of Nacho Nyak Dun v. Yukon, 2017 SCC 58, [2017] 2 S.C.R. 576; Beckman v. Little Salmon/Carmacks First Nation, 2010 SCC 53, [2010] 3 S.C.R. 103; R. v. Ipeelee, 2012 SCC 13, [2012] 1 S.C.R. 433; R. v. Caron, 2007 ABQB 632, 424 A.R. 377; S.A. v. Metro Vancouver Housing Corp., 2019 SCC 4, [2019] 1 S.C.R. 99; Carter v. Canada (Attorney General), 2015 SCC 5, [2015] 1 S.C.R. 331.
Statutes and Regulations Cited
Constitution Act, 1982, s. 35.
Indian Act, R.S.C. 1985, c. I‑5.
APPEAL from a judgment of the Alberta Court of Appeal (Slatter, Rowbotham and Pentelechuk JJ.A.), 2020 ABCA 238, 448 D.L.R. (4th) 555, [2020] A.J. No. 675 (QL), 2020 CarswellAlta 1082 (WL Can.), setting aside a decision of Browne J., 2019 ABQB 746, [2019] A.J. No. 1300 (QL), 2019 CarswellAlta 2059 (WL Can.). Appeal allowed.
Karey Brooks and Robert Janes, Q.C., for the appellant.
Aldo Argento, Lara Mason and Sunny Mann, for the respondent Her Majesty The Queen in Right of the Province of Alberta.
François Joyal and John Provart, for the respondent the Attorney General of Canada.
Heather Cochran and Jacqueline Hughes, Q.C., for the intervener the Attorney General of British Columbia.
Avnish Nanda, for the intervener the Alberta Prison Justice Society.
Senwung Luk and Julia Brown, for the intervener the Chiefs of Ontario.
Melanie Gaston and Kelly Twa, for the intervener the Advocates’ Society.
Carly Fox, for the intervener the Assembly of Manitoba Chiefs.
Alisa Lombard, for the intervener the Indigenous Bar Association in Canada.
Kate Gunn and Bruce McIvor, for the intervener the Treaty 8 First Nations of Alberta.
Andhra Azevedo, David Khan and Margot Venton, for the intervener the Ecojustice Canada Society.
Written submissions only by Guy Régimbald and Alyssa Flaherty‑Spence, for the intervener the Anishinabek Nation.
The judgment of the Court was delivered by
Karakatsanis and Brown JJ. —
I. Introduction
[1] In British Columbia (Minister of Forests) v. Okanagan Indian Band, 2003 SCC 71, [2003] 3 S.C.R. 371, this Court established a framework for assessing claims for advance costs to offset the anticipated litigation expenses of public interest litigants. Among its requirements was that an applicant demonstrate impecuniosity — meaning, that it “genuinely cannot afford to pay for the litigation” (para. 40).
[2] This appeal concerns an application for advance costs by Beaver Lake Cree Nation to fund its litigation under s. 35 of the Constitution Act, 1982. A band within the meaning of the Indian Act, R.S.C. 1985, c. I‑5, Beaver Lake has about 1,200 members, approximately 450 of whom live on a reserve located near Lac La Biche, Alberta. In 2008, band chief Germaine Anderson sued on her own behalf and as a representative of all Beaver Lake Cree Nation beneficiaries of Treaty No. 6 and of Beaver Lake Cree Nation (collectively, Beaver Lake).
[3] While contending that it is “impecunious”, Beaver Lake has access to resources — both assets and income — that could potentially be applied to fund this litigation. Beaver Lake says, however, that these resources must be applied to address other priorities. The issue to be decided here, then, is how the requirement of impecuniosity applies in this circumstance. That is, we must consider how a First Nation government applicant may demonstrate impecuniosity where it has access to resources that could fund litigation, but says it must devote those resources to other priorities.
[4] We conclude that a First Nation government that has access to resources may meet the impecuniosity requirement if it demonstrates that it requires such resources to meet its pressing needs. While the impecuniosity requirement is guided by the condition of necessity, pressing needs are not defined by the bare necessities of life. Rather, and in keeping with the imperative of reconciliation, they ought to be understood from the perspective of that First Nation government. A court may therefore consider the broader context in which a First Nation government sets priorities and makes financial decisions, accounting for competing spending commitments, restrictions on the uses of its resources, and fiduciary and good governance obligations. It follows that, in appropriate cases, a First Nation government may succeed in demonstrating impecuniosity despite having access to resources whose value equals or exceeds its litigation costs.
[5] All this said, the threshold of impecuniosity remains high and is not easily met. Bearing in mind the constraints on the judicial role imposed by the separation of powers, the extraordinary nature of the remedy and the importance of accountability for the expenditure of public funds it entails, the court’s analysis must be firmly grounded in the evidence. The court must be able to (1) identify the applicant’s pressing needs; (2) determine what resources are required to meet those needs; (3) assess the applicant’s financial resources; and (4) identify the estimated costs of funding the litigation. This approach is sufficiently flexible to account for the realities facing First Nations governments and the importance of furthering the goal of reconciliation while adhering to the appropriate judicial role.
[6] Despite finding that Beaver Lake had, at the time of its application, more than $3 million in unrestricted funds and additional ongoing revenue that could be used to pay for its legal fees, the case management judge held that it was — given the impoverished state of the community and the other needs it was required to meet — impecunious and awarded Beaver Lake advance costs (2019 ABQB 746). The Court of Appeal of Alberta reversed, holding that there was insufficient evidence to support that conclusion (2020 ABCA 238, 448 D.L.R. (4th) 555).
[7] In our respectful view, the case management judge erred in her impecuniosity analysis. While her finding that Beaver Lake is an impoverished community with pressing needs is unassailable, her findings were insufficient to conclude that Beaver Lake had satisfied the legal test for impecuniosity.
[8] The matter of Beaver Lake’s impecuniosity, however, should be reconsidered in light of the reasons that follow, and to account for the passage of time which will likely have altered Beaver Lake’s current financial state. We would therefore allow the appeal and remit the matter to the Court of Queen’s Bench of Alberta.
II. Background
[9] Beaver Lake’s underlying claim, in essence, is that the Crown “improperly allowed lands traditionally used by Beaver Lake Cree Nation to be ‘taken up’ for industrial and resource development” thereby “compromis[ing] [its] ability . . . to pursue its traditional way of life” (C.A. reasons, at para. 2). It seeks various declarations of right, injunctions, and damages or equitable compensation.
[10] In support of its application, Beaver Lake says that the cost of litigation — which it estimated as $5 million — is well beyond its reach. By the time Beaver Lake’s application was heard, it had already spent approximately $3 million on legal fees, paid from its own funds and from third party fundraising. A 120‑day trial is presently scheduled to begin in January 2024.
[11] Citing Okanagan and Little Sisters Book and Art Emporium v. Canada (Commissioner of Customs and Revenue), 2007 SCC 2, [2007] 1 S.C.R. 38, the case management judge correctly stated the test for awarding advance costs — that an applicant must demonstrate impecuniosity, present a prima facie meritorious case and raise issues of public importance — and recognized that her decision is ultimately discretionary. Canada and Alberta conceded for the purposes of this application that Beaver Lake’s case was prima facie meritorious. And, the case management judge found that the public importance requirement was satisfied, since Beaver Lake’s case raised a novel issue regarding the interpretation of Aboriginal and treaty rights.
[12] As to impecuniosity, the case management judge found that Beaver Lake’s financial situation had improved in recent years. It was not under any imminent threat of insolvency or third party or co‑management, its recent financial statements showed a surplus, and it had been able to spend $3 million in legal fees for the litigation (averaging $300,000 each year). After reviewing Beaver Lake’s resources — including government funding for a variety of programs, Impact Benefit Agreements negotiated with industry and miscellaneous revenue streams such as third party fundraising — she determined that Beaver Lake had access to “more than $3 million” in unrestricted funds that could potentially finance its litigation (para. 60 (CanLII)).
[13] The case management judge also observed, however, that Beaver Lake has “substantial deficits in housing and infrastructure and . . . high levels of unemployment and social assistance” (para. 30). Relying on the evidence of band council and community members, she held that Beaver Lake was an impoverished community with many pressing needs and concluded that it was impecunious because it “cannot fund the litigation at the rate required to bring it to trial” (para. 63). In the result, she found it appropriate to award advance costs. Beaver Lake, she said, should not have “to choose between pursuing this litigation and attempting to provide for the basic necessities of life” (para. 66). Each of Beaver Lake, Canada and Alberta would therefore contribute $300,000 annually to the credit of Beaver Lake’s legal fees until the trial was concluded or litigation was otherwise resolved.
[14] The Court of Appeal allowed Canada’s and Alberta’s appeals and set aside the case management judge’s order. The case management judge erred, it held, in concluding that Beaver Lake was impecunious. Her finding that Beaver Lake had more than $3 million in unrestricted funds alone signified that Beaver Lake “prima facie did not meet the legal test” (C.A. reasons, at para. 17). It was an error in principle to conclude that Beaver Lake was impecunious when it had financial resources, but chose to spend them on other priorities. Distinguishing “discretionary spending on desirable improvements to community infrastructure and standards of living” from “spending on basic necessities”, it held that an applicant is impecunious only where its expenditures on matters in the latter category render it genuinely unable to pay for the litigation (para. 28). Here, no evidence supported the case management judge’s finding that Beaver Lake would have to choose between spending on basic necessities and pursuing the litigation.
[15] Before the Court of Appeal, Canada tendered fresh evidence that Beaver Lake had received $2.97 million in settlement of a specific claim. The Court of Appeal therefore held that, in light of this evidence and of the case management judge’s findings, and accounting for her errors in principle in disregarding certain assets that were available to Beaver Lake, Beaver Lake had at least $6 to 7 million to fund the litigation. Further, it said that the advance costs order was “unreasonable”, since it failed to adequately balance the parties’ interests, the quantum of the award was not justified on the record, and the order did not include adequate procedural controls.
III. Analysis
[16] Our analysis proceeds as follows. First, we review the test and underlying principles governing awards for advance costs in public interest litigation. Secondly, we consider the impecuniosity requirement of that test, and how it applies to a First Nation government that has access to financial resources that could potentially pay for its litigation. Finally, we apply the framework to illustrate how, we say respectfully, the case management judge erred in her assessment of impecuniosity in this case.
[17] Beaver Lake submits that whether a First Nation government is impecunious must be informed by broad contextual factors and the unique realities of First Nations, including the government’s obligations to its community and the reasonable financial decisions it makes on matters besides litigation. An approach to impecuniosity that focuses exclusively on an applicant’s available financial resources is contrary to the objective of reconciliation inherent in s. 35 litigation. In any event, spending on Beaver Lake’s housing and infrastructure deficits is not just a reasonable financial decision, but a basic need that should take priority over funding the litigation.
[18] Alberta and Canada each submit that, given Beaver Lake’s access to significant assets and revenues, it was not impecunious. While Alberta agrees that the test for impecuniosity is not one of “unqualified impecuniosity” (C.A. reasons, at para. 25), Beaver Lake did not provide sufficient contextual evidence identifying or costing its basic needs or demonstrating that it was using its unrestricted financial resources to address those needs. Alberta acknowledges that the goal of reconciliation is relevant under certain branches of the advance costs test, but argues that it has no role to play in the impecuniosity analysis. Canada says that the exceptional nature of an advance costs award means that merely having legitimate and reasonable infrastructure or social needs sets the bar too low. Beaver Lake did not satisfy the onus of proving that its proposed alternate uses for its financial resources meet a high threshold of necessity.
A. Advance Costs
(1) Guiding Judicial Discretion
[19] We begin with first principles. A court’s equitable jurisdiction over costs confers discretion to decide when, and by whom, costs are to be paid (Okanagan, at para. 35). This includes the power to award advance costs (also referred to as “interim costs”) prior to the final disposition of public interest litigation and in any event of the cause (Okanagan, at para. 1). Such awards are “meant to provide a basic level of assistance necessary for the case to proceed” (Little Sisters, at para. 43).
[20] In Okanagan, this Court held that advance costs could be awarded based on the strong public interest in obtaining a ruling on a legal issue of exceptional importance, that not only transcended the interests of the parties but also would, in the absence of public funding, have failed to proceed to a resolution, creating an injustice (para. 34; R. v. Caron, 2011 SCC 5, [2011] 1 S.C.R. 78, at para. 6). Access to justice is an important policy consideration underlying advance costs awards where a litigant seeks a determination of their constitutional rights and other issues of broad public significance, but lacks the financial resources to proceed. It has also been recognized by this Court as “fundamental to the rule of law” (Trial Lawyers Association of British Columbia v. British Columbia (Attorney General), 2014 SCC 59, [2014] 3 S.C.R. 31, at para. 39; see also B.C.G.E.U. v. British Columbia (Attorney General), [1988] 2 S.C.R. 214, at p. 230). Further, costs awards can permit litigants of limited means, including vulnerable and historically disadvantaged groups, to have access to the courts in cases of public importance.
[21] But this Court has also emphasized that “Okanagan did not establish the access to justice rationale as the paramount consideration in awarding costs” and that “[c]oncerns about access to justice must be considered with and weighed against other important factors” (Little Sisters, at para. 35). Indeed, as this Court explained in Little Sisters, at para. 5, notwithstanding obstacles to access to justice such as underfunded and overwhelmed legal aid programs and growing instances of self‑representation, the Court in Okanagan “did not seek to create a parallel system of legal aid or a court‑managed comprehensive program”. Rather, Okanagan applies to those rare instances where a court would be “participating in an injustice — against the litigant personally and against the public generally” — by declining to exercise its discretion to order advance costs (Little Sisters, at para. 5). To award advance costs outside those instances would amount to “imprudent and inappropriate judicial overreach” (Little Sisters, at para. 44).
[22] The root of the concern underlying this narrow scope for an advance costs order is the separation of powers. In Ontario v. Criminal Lawyers’ Association of Ontario, 2013 SCC 43, [2013] 3 S.C.R. 3, this Court affirmed that “our constitutional framework prescribes different roles for the executive, legislative and judicial branches” (para. 27) and that it is “fundamental that no one of them overstep its bounds, that each show proper deference for the legitimate sphere of activity of the other” (para. 29, quoting New Brunswick Broadcasting Co. v. Nova Scotia (Speaker of the House of Assembly), [1993] 1 S.C.R. 319, at p. 389). And so, in Caron, at para. 6, the Court observed that “[a]s a general rule, of course, it is for Parliament and the provincial legislatures to determine if and how public monies will be used to fund litigation against the Crown” (see also St‑Arnaud v. C.L., 2009 QCCA 97, at para. 29 (CanLII): [translation] “. . . the long‑lasting solution, if there is one, is to be found in distributive justice and falls within the purview of the legislator, rather than in corrective justice, which involves the intervention of the courts”). Allocating public resources among competing priorities is “a policy and economic question; it is a political decision” (Criminal Lawyers’ Association, at para. 43).
[23] Where, therefore, an applicant seeks to have its litigation funded by the public purse, courts must be mindful of the constraints of their institutional role. Those constraints necessarily confine a court’s discretion to grant such an award to narrow circumstances (Okanagan, at para. 41). It must be a “last resort” (Little Sisters, at paras. 36, 41, 71 and 73), reserved for the “rare and exceptional” case (Okanagan, at para. 1) and where, again, to refrain from awarding advance costs would be to participate in an injustice.
[24] In further keeping with these concerns, the test for advance costs is rigorous. Okanagan states three “absolute requirements” (Little Sisters, at para. 37) that must be satisfied: impecuniosity, a prima facie meritorious case, and issues of public importance. Further, while meeting these requirements is necessary, doing so does not automatically entitle an applicant to an advance costs award (Caron, at para. 39). Where the requirements are satisfied, a court — having considered all relevant individual circumstances of the case — retains residual discretion to decide whether to award advance costs, or to consider other ways of facilitating the hearing of the case (Little Sisters, at para. 37).
(2) Reconciliation
[25] Since Okanagan, this Court has decided Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73, [2004] 3 S.C.R. 511, Taku River Tlingit First Nation v. British Columbia (Project Assessment Director), 2004 SCC 74, [2004] 3 S.C.R. 550, and Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage), 2005 SCC 69, [2005] 3 S.C.R. 388. These judgments and others affirmed the Crown’s obligation to consult and accommodate Indigenous groups, and emphasized that the “fundamental objective of the modern law of aboriginal and treaty rights is the reconciliation of aboriginal peoples and non‑aboriginal peoples and their respective claims, interests and ambitions” (Mikisew Cree, at para. 1; see also Haida Nation, at para. 32; Taku River, at para. 42; Newfoundland and Labrador (Attorney General) v. Uashaunnuat (Innu of Uashat and of Mani‑Utenam), 2020 SCC 4, [2020] 1 S.C.R. 15, at para. 22). In R. v. Desautel, 2021 SCC 17, [2021] 1 S.C.R. 533, at para. 22, this Court reiterated that “the two purposes of s. 35(1) are to recognize the prior occupation of Canada by organized, autonomous societies and to reconcile their modern‑day existence with the Crown’s assertion of sovereignty” and that “[t]he same purposes are reflected in the principle of the honour of the Crown, under which the Crown’s historic assertion of sovereignty over Aboriginal societies gives rise to continuing obligations to their successors as part of an ongoing process of reconciliation.” As the parties and several interveners have invoked reconciliation here, it is worth explaining its significance in the advance costs test, with respect to a First Nation government applicant involved in s. 35 litigation.
[26] Where litigation raises novel issues concerning the interpretation of Aboriginal and treaty rights and the infringement of those rights, this may have significant weight in a court’s analysis of the public importance branch of the advance costs test and the exercise of its residual discretion. Other aspects of the Crown‑Aboriginal relationship may be relevant to a court’s exercise of its residual discretion since, at this stage, “the court must remain sensitive to any concerns that did not arise in its analysis of the test” (Little Sisters, at para. 72). For example, a court may be more inclined to exercise its discretion to award advance costs where the Crown has employed tactics to delay the resolution of the applicant’s claim (see Hagwilget Indian Band v. Canada (Minister of Indian Affairs and Northern Development), 2008 FC 574, [2008] 3 C.N.L.R. 136, at paras. 20‑24).
[27] In assessing impecuniosity, a court must respectfully account for the broader context in which First Nations governments such as Beaver Lake make financial decisions. Promoting institutions and processes of Indigenous self‑governance fosters a positive, mutually respectful long‑term relationship between Indigenous and non‑Indigenous communities, thereby furthering the objective of reconciliation (First Nation of Nacho Nyak Dun v. Yukon, 2017 SCC 58, [2017] 2 S.C.R. 576, at para. 10; Beckman v. Little Salmon/Carmacks First Nation, 2010 SCC 53, [2010] 3 S.C.R. 103, at paras. 9‑10). In the context of the impecuniosity analysis, this means that the pressing needs of a First Nation should be considered from the perspective of its government that sets its priorities and is best situated to identify its needs. We return below to what doing so specifically entails in this case.
(3) The Terms of an Advance Costs Award
[28] Where a court decides that an award of advance costs is justified, the terms of the order must be carefully crafted. They must balance the interests of the parties, and should not impose an unfair burden (Okanagan, at para. 41). Accordingly, the order must provide for, or allow for the later provision of, oversight in the form of a “definite structure . . . imposed or approved by the court itself” that sets limits on the rates and hours of legal services and caps the award at an appropriate global amount (Little Sisters, at para. 42). The order should also build in judicial oversight to allow the court to “closely monitor the parties’ adherence to its dictates” (para. 43). In short, an advance costs order is not free rein. Because the public purse is burdened, there must be “scrutiny” of how a litigant spends the opposing party’s money (para. 42).
[29] Other terms of the order will, of course, be informed by a court’s findings in deciding impecuniosity. As outlined below, an applicant pleading impecuniosity must provide a litigation plan and sufficient evidence of its financial resources. While this will obviously be relevant to the quantum of the award, which should represent “a basic level of assistance necessary for the case to proceed” (Little Sisters, at para. 43), it will also assist in determining whether, for example, the terms of an advance cost order should include a requirement that the applicant commit to making some contribution to the litigation. It is, therefore, to that requirement of impecuniosity that we now turn.
B. The Impecuniosity Requirement
(1) Impecuniosity and First Nations Governments: The Threshold
[30] This Court has stated the requirement of impecuniosity in varying, but strict, terms. In Okanagan, it held that an applicant is impecunious if it “genuinely cannot afford to pay for the litigation, and no other realistic option exists for bringing the issues to trial — in short, the litigation would be unable to proceed if the order were not made” (para. 40). Likewise, in Little Sisters, this Court stated that the impecuniosity requirement “means that it must be proven to be impossible to proceed otherwise before advance costs will be ordered” (para. 71). And these general formulations have proven sufficient to decide the cases which have to date called upon the Court to apply the advance costs test. In Okanagan, the applicant bands faced extreme financial difficulty, as they ran deficits to finance day‑to‑day operations and were close to having outside management of their finances imposed upon them. It was impossible for them to fund the estimated litigation costs (paras. 4‑5). In Caron, the applicant had exhausted his limited personal funds, incurred debts, sought and received donations, and faced costly lawyer and expert fees (paras. 11‑13 and 21). Finally, in Little Sisters, this Court did not need to apply the impecuniosity requirement, as the other branches of the advance costs test were not satisfied (para. 67).
[31] What makes this a case of first impression is whether and how, in the context of a claim brought by a First Nation government, it can be said that it “genuinely cannot afford to pay” for, or that it is “impossible to proceed” with, public interest litigation, while having access to financial resources that it says must be otherwise allocated.
[32] The parties agree that, in such circumstances, the assessment of impecuniosity must look beyond the First Nation government’s financial resources in the abstract. A snapshot in time of its resources will be an important part of the analysis. But to assess whether a First Nation government genuinely cannot afford to pay for litigation, a court must also consider the broader context in which that government makes financial decisions, including its competing spending commitments, restrictions on the uses of its resources, and fiduciary and good governance obligations. A First Nation government may genuinely need to allocate some or all of its resources to priorities other than litigation.
[33] The parties and interveners in this appeal presented us with several proposals for modifying or elaborating on the meaning of the impecuniosity requirement to suit the circumstances before us. The intervener the Chiefs of Ontario, submits that where a First Nation government applicant is involved in s. 35 litigation, it should be presumed to be impecunious. Beaver Lake, in its factum, and several interveners argue that an applicant is impecunious where it is unable to finance the litigation because it has expended its resources on other “reasonable financial choices” (see, e.g., A.F., at paras. 4, 55, 58 and 61). Another intervener, the Advocates’ Society, proposes that the impecuniosity requirement should ask whether it would be “unduly onerous” for the applicant to be expected to fund the litigation (I.F., at paras. 3, 24-26 and 28).
[34] We would not modify the impecuniosity requirement in these ways.
[35] We recognize that access to justice is of particular importance in the context of s. 35 litigation, and further acknowledge that, in some cases, the dire financial circumstances of a First Nation government applicant may be the very result of the alleged interference with its constitutional rights at issue in the litigation. None of this, however, warrants a presumption that all First Nations government applicants are impecunious. First, this presumption is inappropriate, as the financial situation of First Nations governments varies throughout Canada. Secondly, the parameters for an award of advance costs and the impecuniosity branch of the test were developed in Okanagan, which was itself a s. 35 claim by a First Nation government applicant, and which held that impecuniosity “must be established on the evidence” (para. 36 (emphasis added)). Finally, a class‑based presumption of impecuniosity would risk turning the advance costs test into a parallel system of legal aid which, as noted above, would signify imprudent and inappropriate judicial overreach.
[36] That said, judicial notice may be taken of the systemic and background factors affecting Indigenous peoples in Canadian society. As this Court reiterated in R. v. Ipeelee, 2012 SCC 13, [2012] 1 S.C.R. 433, at para. 60, in the context of criminal sentencing, “courts must take judicial notice of such matters as the history of colonialism, displacement, and residential schools and how that history continues to translate into lower educational attainment, lower incomes, higher unemployment, higher rates of substance abuse and suicide, and of course higher levels of incarceration for Aboriginal peoples”. In the context of the advance costs test, courts may also take notice of such matters insofar as they may be relevant to understanding a First Nation government’s financial situation and spending priorities.
[37] Nor can we accept thresholds based on a standard of “reasonableness” or on whether it would be “unduly onerous” for the applicant to fund the litigation. While assessing impecuniosity entails reviewing the evidence of a First Nation government’s expendit