Federal – Court of Appeal notes 1890’s provincial undertakings to arbitrate with other provinces as predecessor to current court rule on jurisdiction – #075

In Alberta v. Canada, 2018 FCA 83, the Federal Court of Appeal analyzed the legislative evolution of section 19 of the Federal Courts Act, RSC 1985, c F-7 to resolve a modern day challenge to the Federal Court’s jurisdiction over a Third Party Claim filed by Canada against Ontario regarding contribution and indemnification in an aboriginal law dispute.  In doing so, the Court drew attention to legislation from the 1890’s which confirmed the provincial undertakings to arbitrate against other provinces.  Those legislated undertakings, like many current private agreements, sought to solve difficult, albeit different, procedural challenges created by court litigation.

The current litigation involved claims by Plaintiffs, seven First Nations who are parties to Treaty 7 of 1877.  Plaintiffs had commenced an action against Alberta and Canada for breach of trust and fiduciary obligations and sought, among other relief, a declaration of aboriginal title in the land described in Treaty and located in southern Alberta.  Judging from the docket number, “T-340-99”, Plaintiffs had commenced litigation in 1999.

Alberta had successfully applied to be removed as a defendant on the basis that the Federal Court did not have jurisdiction over a dispute between an individual and the Crown in right of a province and section 19 did not apply. See Shade v. The Queen, 2001 FCT 1067, paras 29-32 for a summary discussion of key sections and issues.

Canada had in April 2010 filed a Statement of Claim in the Court of Queen’s Bench against Alberta seeking contribution and indemnity from Alberta in respect of any judgment Plaintiffs obtained in Federal Court against Canada.  The reasons record instances during the course of the litigation at which Canada advised Alberta that it would be this seeking contribution and indemnity. In February 2014, Canada applied for leave to commence a Third Party Claim in Federal Court against Alberta.  Leave was granted by Prothonotary Milczynski, as Case Management Prothonotary, and upheld by Mr. Justice Michael L. Phelan in Kainaiwa Nation (Blood Tribe) v. Canada, 2016 FC 817.

The appeal concerned the Prothonotary’s and Phelan J.’s finding that it was not plain and obvious that the Federal Court does not have jurisdiction over the Third Party Claim pursuant to section 19.

Section 19 If the legislature of a province has passed an Act agreeing that the Federal Court, the Federal Court of Canada or the Exchequer Court of Canada has jurisdiction in cases of controversies between Canada and that province, or between that province and any other province or provinces that have passed a like Act, the Federal Court has jurisdiction to determine the controversies.

The Federal Court of Appeal analysed the legislative evolution of section 19 and how it sought to address a gap in resolving disputes between provinces and Canada.  The reasons identify Alberta’s own adoption of legislation to trigger section 19 namely section 27(a) of its Judicature Act, RSA 2000, c J-2.  This section grants the Federal Court jurisdiction over disputes between Alberta and Canada, as well as over disputes between Alberta and other provinces in which that other provinces has a corresponding, active legislative equivalent to section 27(a).

A provision similar to section 19 has been in effect since 1875 and has evolved since 1886 beyond only disputes having a civil nature.  The need for a legislative patch stemmed from the nature of the provinces as litigants.  As governments, they were not persons justiciable before the Superior Courts of other provinces and jurisdiction over intergovernmental disputes would not be part of their jurisdiction.  A court action against a province, even before its own courts, had to be permitted by a waiver in favour of such litigation.

The Court acknowledged that, even with the adoption of provincial statutes waiving Crown immunity, the waivers were limited to suing the province before its own courts and often lead to one province having to sue another in the latter’s own courts.

The Court observed that section 19 was “an example of cooperative federalism” and “certainly provided a pragmatic and practical approach to deal with intergovernmental disputes”.

Hard on the heels of this observation that legislation could be “pragmatic and practical” to deal with disputes ill-suited for the courts, the reasons segue into a reference to the solution in place just before section 19 was adopted: arbitration.

[31]  It is worth noting that, in addition to the precursors of section 19 of the FC Act, other types of mechanisms have been used to deal with intergovernmental disputes. In fact, Canada, and the Provincial Crowns of Ontario and of Québec had chosen arbitration before three individual judges, selected by each party with an appeal to the Supreme Court of Canada and then to the Privy Council as the proper forum to deal with the settlement of accounts between Canada, Québec and Ontario, and between those two provinces (see Attorney General for the Dominion of Canada v. Attorney General for Ontario; Attorney General for Quebec v. Attorney General for Ontario, [1897] A.C. 199 (P.C.)). Each of the said parties had enacted statutes to that effect (An Act respecting the Settlement of Accounts between the Dominion of Canada and the Provinces of Ontario and Quebec, and between the said Provinces, S.C. 1891, c. 6; An Act respecting the settlement, by arbitration, of accounts between the Dominion of Canada and the Provinces of Ontario and Quebec, and between the said two provinces, S.O. 1891, c. 2; An Act respecting the settlement, by arbitration, of accounts between the Dominion of Canada and the Provinces of Ontario and Quebec, and between the said two provinces, S.Q. 1890, c. 31).

(note: the mention of “c.31” at the very end of the citation is incorrect: it should read 4/IV).

The case records that, even between provincial and federal governments within Canada, binding arbitration was a real option endorsed by those governments.

For a sample of the legislation by which the Government of Ontario undertook to arbitrate its disputes with Québec, visit the Statutes of Ontario, 1891 and click backwards through to page 6 to read the terms of the brief, nine article An Act respecting the settlement, by arbitration, of accounts between the Dominion of Canada and the Provinces of Ontario and Quebec, and between the said two provinces, S.O. 1891, c. 2.