Case Summary - Québec (Attorney General) v. Pekuakamiulnuatsh Takuhikan, 2024 SCC 39
In Québec (Attorney General) v. Pekuakamiulnuatsh Takuhikan (Pekuakamiulnuatsh), the Supreme Court of Canada (SCC) ruled that Québec's refusal to renegotiate funding terms violated the principles of good faith and the honour of the Crown. The SCC ordered Québec to pay damages in line with reconciliatory justice to restore the relationship between the parties.
I. Background
This case concerns successive tripartite agreements (the Tripartite Agreements) between the Government of Canada (Canada), the Government of Québec (Québec), and the band council, Pekuakamiulnuatsh Takuhikan (the Band Council), representing the Pekuakamiulnuatsh First Nation (PFN). The Tripartite Agreements aimed to establish and maintain the Sécurité publique de Mashteuiatsh (SPM), an Indigenous police force funded by Canada and Québec.
Broadly put, the Tripartite Agreements sought to address historical harm caused by the imposition of national police services and to promote culturally appropriate policing as a step toward reconciliation. To achieve this, the Tripartite Agreements had three primary objectives: to establish and maintain a police force tailored to the community's needs; to set the maximum financial contributions from Canada and Québec; and to entrust PFN with managing the police force, including bearing some financial responsibility.
While the Tripartite Agreements explicitly capped government contributions at a maximum annual amount, they also included a clause permitting contract extensions (the Renewal Clause). The Renewal Clause reflected an expectation of renewal and renegotiation to ensure the ongoing operation of the police force.
Between 2013 and 2017, the funding provided under the Tripartite Agreements proved insufficient to sustain the SPM. Each fiscal year, the police force incurred operating deficits unrelated to mismanagement or extraordinary expenses. Despite being aware of the funding shortfall, Canada and Québec refused to renegotiate funding terms, presenting the Band Council with a "false choice": agree to renew the agreement without negotiation and deepen the deficit or abandon the SPM and rely on the (previously rejected) services of the Québec provincial police.
As a result of Canada and Québec's refusal to renegotiate, the respondent initiated legal proceedings to recover the accumulated deficits from both governments. The Band Council's claim rested on two grounds: a private law contractual basis rooted in the provisions of the Civil Code of Québec (the C.C.Q.) and a public law basis founded on the principles of Aboriginal law.
II. Judicial history
At trial, the judge dismissed the Band Council's claim, rejecting the allegations that Canada and Québec had breached their duties of good faith, the honour of the Crown, or any fiduciary obligations. The trial judge determined that the Band Council had knowingly agreed to the terms of the Tripartite Agreements despite the inadequate funding. Furthermore, the judge found no evidence of bad faith and therefore concluded that the parties had acted in good faith.
With respect to the claim based on the honour of the Crown, the trial judge held that the Tripartite Agreements did not establish fiduciary obligations. The judge reasoned, among other factors, that the Band Council had not identified a specific collective Indigenous interest over which Canada and Québec had exercised discretion, thereby failing to engage the honour of the Crown. The Band Council appealed.
At the Québec Court of Appeal (the QCCA), the Band Council's appeal was allowed on the grounds that the trial judge had erred in his analysis of both the private law and the public law arguments raised.
In its analysis, the QCCA determined that the honour of the Crown was engaged in this case, and accordingly decided it was unnecessary to consider whether Canada and Québec also had fiduciary obligations. The QCCA characterized Québec and Canada's refusal to renegotiate funding in light of the known...
