In Quebec (Attorney General) v. Pekuakamiulnuatsh Takuhikan, 2024 SCC 39, the Supreme Court of Canada for the first time held that the honour of the Crown can be engaged when governments enter into contracts with Indigenous Peoples and set out a new "reconciliatory" approach to damages resulting from breaches of the honour of the Crown.
Facts
The Pekuakamiulnuatsh First Nation is located on Lac Saint-Jean and is governed by Pekuakamiulnuatsh Takuhikan (Takuhikan), an Indigenous band council.
In 1996, Takuhikan and the governments of Canada and Québec entered a tripartite agreement to create an independent police force, the Sécurité publique de Mashteuiatsh (SPM), that would replace the S'reté du Québec and provide local police services in the community. Under the tripartite agreement, Canada agreed to pay 52% of the SPM's budget and Québec agreed to pay 48%, up to a prescribed maximum amount. Takuhikan agreed to pay for any SPM costs over this amount. The tripartite agreement also provided for periodic renewals of the funding scheme. Successive contract renewals were entered into between 1996 and 2018.
However, the maximum amounts prescribed by the tripartite agreement and renewals were insufficient to pay the SPM's costs. Between 2013 and 2017, a deficit of $1,599,469.95 was incurred by Pekuakamiulnuatsh First Nation to cover the SPM's budget.
In 2017, Takuhikan brought an action in the Québec Superior Court. It argued that Canada and Québec had breached the tripartite agreements between 2013 and 2017, violating the honour of the Crown and the duty of good faith in Québec civil law.
The trial judge held that the honour of the Crown did not apply to these contracts and that there was no breach of the duty of good faith. The Québec Court of Appeal overturned the trial judge's decision. It held that Canada and Québec had violated the honour of the Crown and the duty of good faith and ordered each party to pay its share of the SPM's operating deficit: $832,724.37 for Canada and $767,745.58 for Québec.
Québec appealed this ruling to the Supreme Court of Canada. Canada did not appeal.
The majority opinion
In an 8-1 decision, the Supreme Court upheld the Court of Appeal's decision. The majority opinion, written by Kasirer J., held that the honour of the Crown bound Québec and that Québec violated the honour of the Crown and the duty of good faith. It also affirmed the remedy awarded by the Court of Appeal.
Private law duties: The duty of good faith
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