Supreme Court of Canada **Appeal Heard:** April 23 and 24, 2024

Judgment Rendered: November 27, 2024 Docket: 40619 --- ## Parties Between: Attorney General of Quebec Appellant and Pekuakamiulnuatsh Takuhikan Respondent — and — Attorney General of Canada, Attorney General of Ontario, Attorney General of Saskatchewan, Attorney General of Alberta, Assembly of First Nations Quebec-Labrador, Congress of Aboriginal Peoples, Assembly of Manitoba Chiefs, Indigenous Police Chiefs of Ontario, First Nations Child & Family Caring Society of Canada, Okanagan Indian Band and Assembly of First Nations

Interveners Official English Translation Indexed as: Quebec (Attorney General) v. Pekuakamiulnuatsh Takuhikan 2024 SCC 39 File No.: 40619. 2024: April 23, 24; 2024: November 27. Present: Wagner C.J. and Karakatsanis, Côté, Rowe, Martin, Kasirer, Jamal, O'Bonsawin and Moreau JJ. On appeal from the Court of Appeal for Quebec --- ## Headnote Aboriginal law — Honour of the Crown — Contracts — Good faith — Remedy — Police services — Successive tripartite agreements entered into by governments of Canada and Quebec and band council to allow Indigenous community to establish and maintain Indigenous police force — Government funding provided for in agreements inadequate to ensure maintenance of police force — Council bringing legal proceedings against governments claiming reimbursement of accumulated deficits — Whether agreements engage principles of good faith and of honour of Crown — Whether Crown breached its obligations — Whether reimbursement of accumulated deficits can be appropriate remedy — Civil Code of Québec, arts. 1375, 1376, 1434. Successive tripartite agreements concerning police services were entered into by the Government of Canada, the Government of Quebec and Pekuakamiulnuatsh Takuhikan, a band council that represents the Pekuakamiulnuatsh First Nation in Mashteuiatsh, Quebec. These agreements have three main objectives: to establish and maintain an Indigenous police force, Sécurité publique de Mashteuiatsh ("SPM"), providing services adapted to the Indigenous community of Mashteuiatsh; to set the maximum financial contribution by Canada and Quebec to the operation of that police force; and to entrust the management of the force to Pekuakamiulnuatsh Takuhikan. The contracting parties included a clause permitting the renewal of the agreements so as to ensure the maintenance of the police force over time. Between 2013 and 2017, the government funding provided for in the agreements proved to be inadequate on its own to ensure the maintenance of the SPM. At the end of each fiscal year, the SPM incurred an operating deficit; from 2013 to 2017, Pekuakamiulnuatsh Takuhikan had to assume deficits totalling $1,599,469.95. It brought legal proceedings claiming reimbursement of the accumulated deficits from the governments of Canada and Quebec. It rested its claim on two main grounds: a contractual basis under private law, grounded in the provisions of the Civil Code of Québec, and a public law basis anchored in the principles of Aboriginal law. According to it, Canada and Quebec had refused to genuinely negotiate the funding clauses of the agreements, which was a breach of both the requirements of good faith and the obligations — heavier still for the State — flowing from the honour of the Crown. The trial judge dismissed Pekuakamiulnuatsh Takuhikan's application, holding that the contract is the law of the parties and that the honour of the Crown did not apply. The Court of Appeal set aside that judgment and ordered Canada and Quebec to pay their share of the total amount of the accumulated deficits, $832,724.37 for Canada and $767,745.58 for Quebec. In the Court of Appeal's view, the governments' refusal to fund the SPM justified finding both a violation of the principle of good faith and a failure to uphold the honour of the Crown. Only Quebec appealed from the Court of Appeal's decision, Canada having paid the amount awarded against it by that court. Held (Côté J. dissenting): The appeal should be dismissed. Per Wagner C.J. and Karakatsanis, Rowe, Martin, Kasirer, Jamal, O'Bonsawin and Moreau JJ.: Quebec's refusal to renegotiate its financial contribution when the agreements were renewed was not in keeping with the principle of good faith, a source of private law obligations set out in art. 1375 C.C.Q., which requires parties to conduct themselves in good faith in the performance of a contract. It was also a breach of the obligation to act in a manner consistent with the honour of the Crown, an obligation under public law that Quebec had to fulfill in the performance of the tripartite agreements. As to the manner in which the breach of the requirements of good faith should be redressed, the record does not make it possible to assess compensatory damages in conformity with the principles of corrective justice. However, with regard to the remedy meant to restore the honour of the Crown, which is rooted in reconciliatory justice, an award of damages equal to the accumulated deficits is an appropriate measure that will enable the contracting parties to undertake future negotiations with equanimity. The first element of the applicable analytical framework to address the allegations that the Crown breached its undertakings under the tripartite agreements involves confirming that the general law of obligations, including the requirements of good faith, applies to contracts between an Indigenous community and the State. Under art. 1376 C.C.Q., the general rules on obligations apply to the State, to the extent that they are not excluded or altered by other rules of law. The tripartite agreements in this case are therefore governed by the general law of obligations, including art. 1375 C.C.Q. on good faith; Quebec was required to perform its contractual undertakings toward Pekuakamiulnuatsh Takuhikan in good faith. Good faith requires that every contracting party consider the other party's interests in the performance of the contract, but not that one party subordinate its own interests to those of the other. Parties to a contract must conduct themselves loyally by not unduly increasing the burden on the other party or behaving in an excessive or unreasonable manner. This is a duty of conduct that involves making the performance of the contract consistent with what was undertaken. After a contract is entered into, where the parties have provided through a clause that they will have to enter into negotiations, the obligation to conduct the negotiations in good faith flows directly from the contract. A breach of good faith in negotiating a renewal contemplated by a contract may thus be a source of contractual liability. When parties discuss a renewal clause, they must negotiate faithfully; if they begin renewal negotiations pursuant to the very terms of the contract, they are obliged to behave in a manner that is neither excessive nor unreasonable in this final stage of carrying out their agreement. Refusal to act in good faith in the negotiation of a renewal contemplated by the parties may jeopardize the very purpose of the contract where the achievement of that purpose depends on the existence of a relationship over time. In this case, Quebec had an obligation to act in good faith, including when conducting the negotiations contemplated by the tripartite agreements, and it breached that duty. The parties had provided for an extension mechanism to facilitate renewal; they therefore had an obligation to carry out any renewal negotiations in good faith. This obligation could not serve to require or impose specific outcomes from the negotiations. Moreover, Quebec had no obligation to renew the arrangement for another fiscal year. However, if it sought to do so, the agreements show that renewal would be achieved through negotiation. In such a case, Pekuakamiulnuatsh Takuhikan was not entitled to a specific level of funding, but, by the terms of the contract itself, it did have a legitimate expectation that Quebec would consider its perspective in negotiating the extent of its contribution. Quebec's refusal to discuss an increase in funding constitutes unreasonable conduct contrary to the requirements of good faith. Quebec chose to continue the contractual relationship while at the same time refusing to revisit its financial contribution, even though it knew that the SPM was underfunded. That conduct disregarded the context and its counterparty's interests. By adopting an intransigent position through its refusal to negotiate, Quebec acted contrary to what the agreements stipulated and to the binding force of contracts as enshrined in art. 1434 C.C.Q. Quebec caused injury to Pekuakamiulnuatsh Takuhikan by acting in conflict with the expectations raised by the contractual mechanism put in place by the parties for the renewal of the agreements. That conduct was unreasonable because it undermined Pekuakamiulnuatsh Takuhikan's legitimate expectations and disrupted the parties' contractual objective of maintaining the SPM. Quebec should have entered into genuine negotiations with its counterparty and should have listened and shown openness. The absence of genuine negotiations left Pekuakamiulnuatsh Takuhikan in a no‑win situation: either it continued to impoverish itself to maintain the SPM and preserve the progress that the SPM represented in terms of self‑government, or it abolished the SPM, which meant both returning to the inadequate services of the Sûreté du Québec and suffering a setback with respect to self‑government. Despite the difficulties, Pekuakamiulnuatsh Takuhikan chose, year after year, to preserve the SPM, which required it to use its own funds to absorb the annual deficits. The governments of Canada and Quebec turned a deaf ear to Pekuakamiulnuatsh Takuhikan's requests and complaints, and the quality of the SPM's services suffered as a result. The second element of the framework involves establishing that the principle of the honour of the Crown also applies to the performance of Quebec's contractual undertakings in this case. While art. 1376 C.C.Q. provides that the private law of obligations applies to the State, it also specifies that this is subject to any other rules of law which may be applicable to it. This qualification thus refers implicitly to the idea that public common law rules may form a distinct liability regime for the State that supplements the one in the Civil Code of Québec. The principle of the honour of the Crown is one such public law rule that may, in some contexts, broaden the scope of state liability. However, there is no basis for concluding that the principle of the honour of the Crown is implicitly incorporated into contracts by operation of art. 1434 C.C.Q. Consequently, while the honour of the Crown is engaged where the State has contractual obligations, its source, unlike those contractual obligations, is anchored in public law rules. As a common law rule originating in the special relationship between the Crown and Indigenous peoples, the principle of the honour of the Crown is itself anchored to the goal of facilitating the reconciliation of the Crown's interests with those of Indigenous peoples, including by promoting negotiation and the just settlement of their claims. The honour of the Crown is a constitutional principle that looks forward to reconciliation in an ongoing, mutually respectful long‑term relationship. Regardless of the means used by the Crown to advance the process of reconciliation, the principle of the honour of the Crown must be applicable when it is required. Unlike good faith, the honour of the Crown does not apply to the performance of every contract or to every contractual undertaking given by the Crown to an Indigenous entity. Indeed, it applies only in the performance of contracts between the State and Indigenous groups that are intended to foster the modern‑day reconciliation of pre‑existing Indigenous societies with the Crown's historic assertion of sovereignty. The task is therefore to determine the legal test that can be used in this case to identify contractual undertakings that attract the honour of the Crown. First, the contract in question must be entered into by the Crown and an Indigenous group by reason and on the basis of the group's Indigenous difference. Because the principle of the honour of the Crown rests on the special relationship between the Crown and Indigenous peoples, the honour of the Crown is engaged only by an obligation assumed by the Crown on the basis of this special relationship, which is different from the one it has with the population in general. Second, the contract in question must relate to an Indigenous right of self‑government, whether the right is established or is the subject of a credible claim. It is not necessary, in order for the principle of the honour of the Crown to apply, that such a right already be recognized by the courts or the Crown. A credible claim is sufficient to impose duties of honourable dealing on the Crown. To ascertain whether the tripartite agreements in this case satisfy this test, it is necessary to undertake a characterization exercise, through which the contract at issue is linked to a normative category that can serve to determine the applicable legal regime. The purpose of characterizing a contract is to identify its legal nature. This exercise is not governed strictly by the intention of the parties and is based on the legal nature of the act created. It is a question of law. In this case, the characteristic prestation of the tripartite agreements has three aspects. The tripartite agreements provide for the establishment and maintenance of an Indigenous police force, set out a shared funding regime between the governments of Canada and Quebec and Pekuakamiulnuatsh Takuhikan, and provide for the independent management of the police force by Pekuakamiulnuatsh Takuhikan. In light of this characteristic prestation, it appears that the parties entered into the tripartite agreements on the basis and by reason of the Indigenous difference of the Pekuakamiulnuatsh. Only Indigenous communities may enter into an agreement with Quebec to establish or maintain an Indigenous police force. Moreover, the tripartite agreements were entered into in the context of the nation‑to‑nation relationship between Quebec and Pekuakamiulnuatsh Takuhikan, and the aim of the funding is to remedy the historical harm resulting from the imposition of the national police on Indigenous peoples and the difficulties experienced by Indigenous communities in managing their internal security. The tripartite agreements also concern the Indigenous right of self‑government claimed by the Pekuakamiulnuatsh First Nation in matters of public safety in the community. The establishment and maintenance of Indigenous police forces that are managed by the communities covered by an agreement and that provide culturally appropriate services to those communities distinguish these police forces from those serving the population in general. It was in the context of the claim by Indigenous peoples to the right of self‑government and control over their institutions that Quebec recognized, in the Police Act, the possibility for First Nations to establish a culturally appropriate police force. The need of Indigenous peoples for such police services originates in the difficult, and at times even traumatizing, relationship that Indigenous peoples had, and in some cases continue to have, with the police services imposed on them over the years by the Crown. The opportunity to enter into agreements whose objective is to ensure the provision of culturally appropriate police services managed by the Indigenous communities served therefore contributes to reconciliation. In sum, the tripartite agreements must be characterized as contracts that engage the honour of the Crown. The fact that the tripartite agreements are not treaties protected by s. 35(1) of the Constitution Act, 1982 and that Pekuakamiulnuatsh Takuhikan is not seeking to establish a right protected by s. 35 of the Constitution Act, 1982 makes no difference to the characterization of the contract. Even though the parties have agreed that there will be no final resolution of the claims of the Pekuakamiulnuatsh through the tripartite agreements, the fact remains that these agreements relate to the subject‑matter of their claims, that is, the right of self‑government in matters of internal security. The question is not whether the agreement recognizes or modifies Indigenous rights, but only whether it relates to this claimed right. Because it is not a cause of action itself, the principle of the honour of the Crown is expressed through the specific obligations to which it gives rise. The content of these obligations varies with the circumstances. When the honour of the Crown applies to a contract, the Crown must meet a standard of conduct that is higher than in the context of an ordinary contractual relationship and must act in a manner that fosters reconciliation. When the Crown decides to enter into a contractual relationship that engages its honour, it must negotiate, interpret and apply the contracts with honour and integrity while avoiding even the appearance of sharp dealing. This is an obligation that has long been recognized in the context of treaty making and implementation and that can be transposed to the contractual context. The Crown must also avoid adopting an intransigent attitude. Once an agreement has been entered into, the Crown must conduct itself with honour and integrity in performing its obligations. This means, among other things, that it must construe the terms of the agreement generously and comply with them scrupulously while avoiding any breach of them. The Crown must also act honourably in any negotiations to change or renew the agreement. In this case, because the tripartite agreements contemplated the renegotiation of their funding clauses, the honour of the Crown imposed an obligation on the Crown to conduct itself honourably during the renewal negotiations. Quebec did not comply with this obligation. Through its intransigent attitude, it acted dishonourably by refusing to negotiate the funding terms of the tripartite agreements. Quebec refused to consider Pekuakamiulnuatsh Takuhikan's repeated requests to renegotiate the level of funding for its police force even though it knew that the SPM was underfunded and that Pekuakamiulnuatsh Takuhikan would accept an inadequate level of funding to avoid resorting to the ill‑adapted services of the Sûreté du Québec. That conduct represents a breach of the obligation to perform the tripartite agreements with honour and integrity. The honour of the Crown requires the Crown to meaningfully engage in genuine negotiations in a manner conducive to maintaining a relationship that can support the ongoing process of reconciliation. By refusing to renegotiate the level of funding despite Pekuakamiulnuatsh Takuhikan's repeated complaints and the precarious situation in which it found itself, Quebec conducted itself in a manner that fell well below the standard of honourable conduct. Through its breach, Quebec jeopardized the contractual equilibrium and the very purpose of the tripartite agreements. Quebec thus failed to comply with its obligation to act with honour, establishing a second independent basis of liability. Quebec's conduct can therefore be characterized as both a civil fault and a breach of a public law obligation. These two legal regimes differ in nature, and the remedies associated with them are grounded in distinct conceptions of justice. The civil law regime is based on corrective justice, and its aim is to place the aggrieved party in the position it would have been in but for the fault committed. The public law regime is concerned instead with the long‑term relationship between the Crown and Indigenous communities, and its aim is to restore the honour of the Crown and thereby foster reconciliation; this is reconciliatory justice. In the case of the civil law regime and the breach of good faith, once a failure to meet the requirements of good faith has been established, the plaintiff must prove the extent of the injury on the basis of the principle of restitutio in integrum, or full restitution. The damages awarded must not exceed the amount necessary to fully compensate for the injury suffered and place the plaintiff in the position it would have been in but for the breach of good faith. In this case, the Court is unable to carry out this assessment, as it has neither sufficient evidence nor an adequate factual foundation to perform this task properly. A remedy meant to address the breach of an obligation flowing from the honour of the Crown rests on a basis other than corrective justice. Reconciliatory justice is not intended only to compensate the Indigenous claimant for harm suffered as a result of past wrongs; it serves above all to restore and improve the relationship between the Crown and Indigenous peoples. The aim is to impose a measure that places the parties back on the path to reconciliation. In this exercise, it is important to be sensitive to Indigenous perspectives and to be creative within a principled legal framework. A breach of the obligations flowing from the honour of the Crown makes available the full range of remedies, including damages and other coercive relief. The remedy relating to the honour of the Crown will vary with the circumstances of each case; no type of remedy takes precedence over the others. In this case, the relationship between the parties was undermined by Quebec's intransigent attitude at the stage of renewing the tripartite agreements. That attitude benefited it and harmed Pekuakamiulnuatsh Takuhikan, not only in financial terms but also from the standpoint of the quality of policing and its dignity, as its freedom of choice was not respected. By imposing a difficult choice on Pekuakamiulnuatsh Takuhikan — either continue to impoverish itself to maintain the SPM, or abolish the SPM — Quebec did not deal with it on an equal footing and did not act in a spirit of cooperation and respect. This is also part of the damage caused to the relationship, which must now be repaired. In the circumstances, the Court of Appeal could conclude that repairing this damage requires an award of damages. The appropriate quantum of damages must be determined through an analysis focused on reconciliatory justice to ensure that the order made will have the effect of restoring the honour of the Crown. The correct amount to be awarded for a breach of an obligation flowing from the honour of the Crown is a highly contextual issue. In this case, the amount determined by the Court of Appeal should be upheld given the particular circumstances of the case, and having regard to the purpose of the damages, which serve not only to compensate for past injury but also to restore the relationship for the future. Per Côté J. (dissenting): The appeal should be allowed and the trial judgment should be restored. The principle of good faith and the principle of the honour of the Crown do not allow a court to disregard or ignore certain express clauses of a contract and to impose obligations that are inconsistent with their unambiguous terms. This case involves a contractual claim for damages in which Pekuakamiulnuatsh Takuhikan did not apply to have the agreements annulled or to have certain clauses in the agreements declared abusive. The agreements limit in express terms the governments' contribution to a maximum amount determined each year, such that Quebec undertook to contribute financially to the establishment and maintenance of the SPM but did not undertake to pay all of the costs incurred, or to fund services equal to those provided in communities in the region. Furthermore, pursuant to the agreements, Pekuakamiulnuatsh Takuhikan is responsible for deficits incurred in excess of the financial contribution that the governments wish to provide and the governments are not responsible for undertakings given by Pekuakamiulnuatsh Takuhikan. These clauses circumscribe and limit the scope of Quebec's undertaking. There is agreement with the majority that the principle of the honour of the Crown is implicitly incorporated into how the contractual undertakings agreed to by the parties must be fulfilled. The tripartite agreements, which provide for the financial support of Indigenous police services by the governments, are not purely commercial contracts. It follows that the principle of the honour of the Crown cannot be ignored in the assessment of Quebec's conduct in the course of these agreements. Furthermore, Quebec's objective in enacting certain sections of the Police Act is based on the reconciliation of pre‑existing Indigenous societies with the assertion of Crown sovereignty. Pursuant to art. 1434 C.C.Q., the public law obligations derived from the tripartite agreements in conformity with law are added to the express stipulations of those agreements. The honour of the Crown and the obligations flowing therefrom are therefore implicitly incorporated into the tripartite agreements by operation of art. 1434 C.C.Q. However, that provision does not permit the introduction of an implied obligation that would be inconsistent with the terms of the contract. Obligations that may flow from the principle of the honour of the Crown also cannot be excluded by the entire agreement clause stipulated in the agreements. There is disagreement with the majority, however, concerning the scope of the contractual undertakings agreed to by Pekuakamiulnuatsh Takuhikan and Quebec. First, the government parties did not undertake to pay all of the costs related to the creation and maintenance of a police force that could ensure the same level of service as that found in communities in the region. Such an obligation appears nowhere in the language of the agreements. Quebec's undertaking flows strictly from the tripartite agreements given that the parties expressed their intent to be bound solely by the express terms of the tripartite agreements by stipulating an entire agreement clause to exclude any content external to the contract. This entire agreement clause excludes the application of arts. 1425 and 1434 C.C.Q. Second, Quebec's undertaking cannot be defined in light of the objectives set out in the First Nations Policing Policy (1996) ("Federal Policy") and the First Nations Policing Program ("FNPP"). The Federal Policy and the FNPP could not bind Quebec for three reasons. First, Quebec did not undertake to implement the Federal Policy. Second, the Federal Policy does not establish binding rules and is therefore not subject to judicial sanction. Third, nowhere in the Federal Policy is it stated that the governments will fund all of the costs of the police services. Lastly, the principle of the honour of the Crown cannot serve as a basis for rewriting the terms of the tripartite agreements to introduce into them an obligation for Quebec to pay all of the costs related to the creation and maintenance of the SPM. There is therefore disagreement with the majority regarding their conclusions on the alleged breaches of contractual good faith and of the principle of the honour of the Crown. The majority's analysis expands the purpose of Quebec's undertaking to include the obligation to provide services adapted to the community comparable to those of communities in the region even though this objective is nowhere to be found in the agreements. This is tantamount to rewriting the terms of these agreements, which the principle of the honour of the Crown cannot be used to do. Such an approach is also contrary to the implied obligations regime in Quebec civil law. An implied obligation can only fill a gap in the terms of the contract. Article 1434 C.C.Q. cannot be used to frustrate other provisions of the agreement. With respect to good faith, Quebec fulfilled all of its undertakings and did not abuse any right provided for in the contract, including regarding the renewal of the tripartite agreements. It was not unreasonable for Quebec to rely on the words of the agreements concerning the responsibility for the accumulated deficits. There is no evidence of any right provided for in the agreements that Quebec would have abused. Regarding the principle of the honour of the Crown, its application to how the contractual undertakings must be fulfilled leads to the conclusion that Quebec acted honourably. The government parties proceeded to renew the agreements with the resources available and further to the appropriations given by Parliament and the Assemblée nationale, as contemplated in the agreements. The evidence shows that, throughout their contractual relationship, Quebec listened attentively to its counterparty's grievances and was flexible in seeking solutions to the problem of the underfunding of its police force. Quebec provided additional financial support through a variety of measures, particularly to maintain the SPM and to contribute to funding the construction of the community's police station. Quebec went beyond what was required by the terms of the agreements by providing these additional amounts to financially support the SPM. This additional financial assistance must be taken into account in the assessment of Quebec's conduct with respect to the renewal of the tripartite agreements and with respect to the injury that may have resulted from it. Moreover, Pekuakamiulnuatsh Takuhikan had financial autonomy during the renewal of the agreements. Its contractual autonomy is particularly reflected in the free and informed choice it made to offer a level of service above the one provided for in the tripartite agreements. Pekuakamiulnuatsh Takuhikan is challenging Quebec's public policy decisions concerning the giving of financial support to Indigenous police forces. However, the role of the courts is not to interfere in this way in the budget decisions of government parties, which are reflected in the tripartite agreements at issue. Concluding otherwise has the effect of sanctioning a discretionary policy decision concerning the allocation of budgetary resources of the State, which is something the Court cannot do without brushing aside the separation of powers doctrine. With respect to the remedy, it is not necessary to create a remedial scheme based on reconciliatory justice. The rules of corrective justice under the civil liability regime can be adapted to consider the Indigenous perspective and the imperative of reconciliation. While the exercise of quantifying damages may pose additional difficulties for the courts when it comes to remedying a breach of the principle of the honour of the Crown, they are accustomed to using their discretion in determining an indemnity that is fair and reasonable. When faced with a largely unforeseeable and unquantifiable injury resulting from dishonourable conduct by the Crown, the court may use its discretion to establish a quantum that will take into account restoring the honour of the Crown and be somewhat creative in exercising its discretion. This approach avoids the trap posed by the highly discretionary nature of the remedy anchored in reconciliatory justice in a contractual context. Accepting such a remedial scheme could discourage governments from signing these kinds of agreements with Indigenous entities. --- ## Cases Cited ### By Kasirer J. Referred to: Ponce v. Société d'investissements Rhéaume ltée, 2023 SCC 25; Churchill Falls (Labrador) Corp. v. Hydro-Québec, 2018 SCC 46, [2018] 3 S.C.R. 101; Houle v. Canadian National Bank, [1990] 3 S.C.R. 122; Prud'homme v. Prud'homme, 2002 SCC 85, [2002] 4 S.C.R. 663; Sharp v. Autorité des marchés financiers, 2023 SCC 29; R. v. Desautel, 2021 SCC 17, [2021] 1 S.C.R. 533; Beckman v. Little Salmon/Carmacks First Nation, 2010 SCC 53, [2010] 3 S.C.R. 103; Manitoba Metis Federation Inc. v. Canada (Attorney General), 2013 SCC 14, [2013] 1 S.C.R. 623; Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73, [2004] 3 S.C.R. 511; Ontario (Attorney General) v. Restoule, 2024 SCC 27; Bhasin v. Hrynew, 2014 SCC 71, [2014] 3 S.C.R. 494; Uniprix inc. v. Gestion Gosselin et Bérubé inc., 2017 SCC 43, [2017] 2 S.C.R. 59; C.M. Callow Inc. v. Zollinger, 2020 SCC 45, [2020] 3 S.C.R. 908; Mikisew Cree First Nation v. Canada (Governor General in Council), 2018 SCC 40, [2018] 2 S.C.R. 765; Taku River Tlingit First Nation v. British Columbia (Project Assessment Director), 2004 SCC 74, [2004] 3 S.C.R. 550; Newfoundland and Labrador (Attorney General) v. Uashaunnuat (Innu of Uashat and of Mani-Utenam), 2020 SCC 4, [2020] 1 S.C.R. 15; Finney v. Barreau du Québec, 2004 SCC 36, [2004] 2 S.C.R. 17; Hinse v. Canada (Attorney General), 2015 SCC 35, [2015] 2 S.C.R. 621; Kosoian v. Société de transport de Montréal, 2019 SCC 59, [2019] 4 S.C.R. 335; Tsilhqot'in Nation v. British Columbia, 2014 SCC 44, [2014] 2 S.C.R. 257; Wewaykum Indian Band v. Canada, 2002 SCC 79, [2002] 4 S.C.R. 245; Rio Tinto Alcan Inc. v. Carrier Sekani Tribal Council, 2010 SCC 43, [2010] 2 S.C.R. 650; Mikisew Cree First Nation v. Canada (Minister of Canadian Heritage), 2005 SCC 69, [2005] 3 S.C.R. 388; R. v. Badger, [1996] 1 S.C.R. 771; Saadati v. Moorhead, 2017 SCC 28, [2017] 1 S.C.R. 543; Shot Both Sides v. Canada, 2024 SCC 12; Clyde River (Hamlet) v. Petroleum Geo-Services Inc., 2017 SCC 40, [2017] 1 S.C.R. 1069; Vancouver (City) v. Ward, 2010 SCC 27, [2010] 2 S.C.R. 28; Montréal (City) v. Octane Stratégie inc., 2019 SCC 57, [2019] 4 S.C.R. 138; Reference re An Act respecting First Nations, Inuit and Métis children, youth and families, 2024 SCC 5; Dickson v. Vuntut Gwitchin First Nation, 2024 SCC 10; Anderson v. Alberta, 2022 SCC 6, [2022] 1 S.C.R. 29. ### By Côté J. (dissenting) Churchill Falls (Labrador) Corp. v. Hydro-Québec, 2018 SCC 46, [2018] 3 S.C.R. 101; Dominique (on behalf of the members of the Pekuakamiulnuatsh First Nation) v. Public Safety Canada, 2022 CHRT 4; Canada (Attorney General) v. Pekuakamiulnuatsh First Nation, 2023 FC 267; Ontario v. Criminal Lawyers' Association of Ontario, 2013 SCC 43, [2013] 3 S.C.R. 3; Manitoba Metis Federation Inc. v. Canada (Attorney General), 2013 SCC 14, [2013] 1 S.C.R. 623; Mitchell v. Peguis Indian Band, [1990] 2 S.C.R. 85; R. v. Badger, [1996] 1 S.C.R. 771; Mikisew Cree First Nation v. Canada (Governor General in Council), 2018 SCC 40, [2018] 2 S.C.R. 765; Canada (Attorney General) v. British Columbia Investment Management Corp., 2019 SCC 63, [2019] 4 S.C.R. 559; Beckman v. Little Salmon/Carmacks First Nation, 2010 SCC 53, [2010] 3 S.C.R. 103; R. v. Desautel, 2021 SCC 17, [2021] 1 S.C.R. 533; Prud'homme v. Prud'homme, 2002 SCC 85, [2002] 4 S.C.R. 663; Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73, [2004] 3 S.C.R. 511; First Nation of Nacho Nyak Dun v. Yukon, 2017 SCC 58, [2017] 2 S.C.R. 576; Saskatchewan (Attorney General) v. Witchekan Lake First Nation, 2023 FCA 105, 482 D.L.R. (4th) 352; Houle v. Canadian National Bank, [1990] 3 S.C.R. 122; Ontario (Attorney General) v. Restoule, 2024 SCC 27. --- ## Statutes and Regulations Cited Act to amend the Police Act and the Act respecting police organization as regards Native police, S.Q. 1995, c. 12. Canadian Charter of Rights and Freedoms, s. 24(1). Civil Code of Québec, preliminary provision, arts. 6, 7, Book Five, 1375, 1376, 1425, 1434, 1437, 1607, 1611 et seq., 1613. Code of Civil Procedure, CQLR, c. C-25.01, art. 18. Code of ethics of Québec police officers, CQLR, c. P‑13.1, r. 1. Constitution Act, 1982, ss. 25, 35. Federal Courts Act, R.S.C. 1985, c. F‑7, s. 18.1. Indian Act, R.S.C. 1985, c. I‑5. Police Act, CQLR, c. P‑13.1, Title II, Chapter I, ss. 48, 50, 70, 72, 79, Division IV, 90 [am. 2008, c. 13, s. 3; am. 2023, c. 20, s. 10], 93 [am. 2023, c. 20, s. 11], Sch. G. Police Act, R.S.Q., c. P-13, s. 79.0.1 [ad. 1995, c. 12, s. 1]. Supreme Court Act, R.S.C. 1985, c. S-26, s. 46.1. --- ## Authors Cited Baudouin, Jean‑Louis, and Pierre‑Gabriel Jobin. Les obligations, 7th ed. by Pierre‑Gabriel Jobin and Nathalie Vézina. Cowansville, Que.: Yvon Blais, 2013. Baudouin, Jean‑Louis, Patrice Deslauriers and Benoît Moore. La responsabilité civile, 9th ed. Montréal: Yvon Blais, 2020. Bénabent, Alain. Droit des obligations, 20th ed. Paris: LGDJ, 2023. Canada. Indian and Northern Affairs. Task Force on Policing on Reserves. Indian Policing Policy Review: Task Force Report. Ottawa, 1990. Canada. National Inquiry into Missing and Murdered Indigenous Women and Girls. Reclaiming Power and Place: The Final Report of the National Inquiry into Missing and Murdered Indigenous Women and Girls. Vancouver, 2019. Canada. Public Safety. Terms and Conditions for Contribution Funding Under the First Nations Policing Program, December 9, 2015. Canada. Solicitor General. First Nations Policing Policy. Ottawa, updated 1996.[^1] Crépeau, Paul‑André. "Le contenu obligationnel d'un contrat" (1965), 43 Can. Bar Rev. 1. Dufour, Marie‑Hélène. "L'impact de la bonne foi en droit de la construction" (2023), 57 R.J.T.U.M. 229. Fortin, Marie‑France. "L'État québécois et la Couronne canadienne: conception de la puissance publique à la lumière du droit de la responsabilité de la Couronne" (2022), 56 R.J.T.U.M. 379. Hoehn, Felix. "The Duty to Negotiate and the Ethos of Reconciliation" (2020), 83 Sask. L. Rev. 1. Hogg, Peter W., and Laura Dougan. "The Honour of the Crown: Reshaping Canada's Constitutional Law" (2016), 72 S.C.L.R. (2d) 291. Jabbour, Rita. La bonne foi dans l'exécution du contrat. Issy‑les‑Moulineaux, France: LGDJ, 2016. Jutras, Daniel. "Cartographie de la mixité: la common law et la complétude du droit civil au Québec" (2009), 88 Can. Bar Rev. 247. Jutras, Daniel. "Regard sur la common law au Québec: perspective et cadrage" (2008), 10 R.C.L.F. 311. Lebrun, Christine. "La clause d'intégralité au Québec" (2008), 67 R. du B. 39. Lefebvre, Brigitte. La bonne foi dans la formation du contrat. Cowansville, Que.: Yvon Blais, 1998. Lluelles, Didier, and Benoît Moore. Droit des obligations, 3rd ed. Montréal: Thémis, 2018. Mainville, Robert. An Overview of Aboriginal and Treaty Rights and Compensation for Their Breach. Saskatoon: Purich Publishing, 2001. Malinvaud, Philippe, Mustapha Mekki and Jean-Baptiste Seube. Droit des obligations, 15th ed. Paris: LexisNexis, 2019. Martin, Andrew Flavelle, and Candice Telfer. "The Impact of the Honour of the Crown on the Ethical Obligations of Government Lawyers: A Duty of Honourable Dealing" (2018), 41 Dal. L.J. 443. Motard, Geneviève, and Benjamin Chartrand. "Négocier de bonne foi: les accords commerciaux, les sociétés d'État et le principe de l'honneur de la Couronne" (2019), 70 U.N.B.L.J. 172. Ontario. Ipperwash Inquiry. Report of the Ipperwash Inquiry. Toronto, 2007. Pineau, Jean, et al. Théorie des obligations, 5th ed. by Catherine Valcke. Montréal: Thémis, 2023. Popovici, Adrian. La couleur du mandat. Montréal: Thémis, 1995. Quebec. Assemblée nationale. Journal des débats, vol. 34, No. 19, 1st Sess., 35th Leg., January 27, 1995, pp. 1252-1254. Quebec. Ministère de la Justice. Commentaires du ministre de la Justice, vol. I, Le Code civil du Québec — Un mouvement de société. Québec, 1993. Quebec. Public Inquiry Commission on relations between Indigenous Peoples and certain public services in Québec. Inquiry Commission on relations between Indigenous Peoples and certain public services in Québec: listening, reconciliation and progress — Final report. Val‑d'Or, 2019. Roach, Kent. Constitutional Remedies in Canada, 2nd ed. Toronto: Canada Law Book, 2013 (loose‐leaf updated November 2024, release 2). Slattery, Brian. "Aboriginal Rights and the Honour of the Crown" (2005), 29 S.C.L.R. (2d) 433. --- ## Appeal Information APPEAL from a judgment of the Quebec Court of Appeal (Bich, Bouchard and Ruel JJ.A.), 2022 QCCA 1699, [2022] AZ-51901157, [2022] Q.J. No. 13803 (Lexis), 2022 CarswellQue 21485 (WL), setting aside a decision of Dufresne J., 2019 QCCS 5699, [2019] AZ‑51660818, [2019] J.Q. no 11652 (Lexis), 2019 CarswellQue 12186 (WL). Appeal dismissed, Côté J. dissenting. --- ## Counsel Solicitors for the appellant: Lavoie, Rousseau (Justice-Québec), Québec; Ministère de la Justice du Québec, Direction du droit constitutionnel et autochtone, Québec; Bernard, Roy (Justice‑Québec), Montréal. Solicitors for the respondent: Cain Lamarre, Roberval. Solicitor for the intervener the Attorney General of Canada: Department of Justice Canada, Montréal. Solicitor for the intervener the Attorney General of Ontario: Ministry of the Attorney General, Crown Law Office — Civil, Toronto. Solicitor for the intervener the Attorney General of Saskatchewan: Saskatchewan Ministry of Justice and Attorney General, Constitutional Law Branch, Regina. Solicitor for the intervener the Attorney General of Alberta: Alberta Justice, Constitutional and Aboriginal Law, Edmonton. Solicitors for the intervener the Assembly of First Nations Quebec-Labrador: Dionne Schulze, Montréal. Solicitors for the intervener the Congress of Aboriginal Peoples: Paliare Roland Rosenberg Rothstein, Toronto. Solicitors for the intervener the Assembly of Manitoba Chiefs: Fox, Calgary. Solicitors for the intervener the Indigenous Police Chiefs of Ontario: Falconers, Toronto. Solicitors for the intervener the First Nations Child & Family Caring Society of Canada: Burchell Wickwire Bryson, Halifax; Conway Baxter Wilson, Ottawa. Solicitors for the intervener the Okanagan Indian Band: JFK Law, Vancouver. Solicitor for the intervener the Assembly of First Nations: Assembly of First Nations, Ottawa. --- ## Reasons for Judgment ### Kasirer J. (Wagner C.J. and Karakatsanis, Rowe, Martin, Jamal, O'Bonsawin and Moreau JJ. concurring) ### Table of Contents | Section | Paragraph | |---------|-----------| | I. Overview | 1 | | II. Background | 20 | | III. Judicial History | 47 | | IV. Parties' Arguments and Issues on Appeal | 62 | | V. Analysis | 71 | | Introduction: Contractual Undertakings Given in the Tripartite Agreements | 71 | | A. Bases for Quebec's Liability | 96 | | (1) Good Faith, a Source of Private Law Obligations | 96 | | (2) The Honour of the Crown, a Source of Public Law Obligations | 140 | | B. Appropriate Remedy | 198 | | (1) Breach of Good Faith: Restitutio in Integrum | 205 | | (2) Breach of the Obligation To Act With Honour: Restoring the Honour of Crown | 210 | | VI. Conclusion | 237 | --- ### I. Overview [ 1 ] Do obligations undertaken by contract between the Government of Quebec and an Indigenous group engage the principles of good faith and of the honour of the Crown? If it is found that, in the performance of the contract, Quebec is liable on either of these distinct grounds, what remedy should be granted to address the breach? Where damages are claimed, as in this case, the remedy under the private law of obligations will in principle be limited to the amount required to compensate for the injury caused to the creditor by the failure to meet the requirements of good faith. But where there has been a breach of the obligation to act in a manner consistent with the honour of the Crown, can the public law remedy granted to the Indigenous group be distinguished from the private law remedy with a view to restoring the relationship between the contracting parties, both for the past and for the future, and thus placing them back on the constitutional path to reconciliation? These are the main questions raised by this appeal. --- [Paragraphs 2–240: Majority reasons of Kasirer J., concurred in by Wagner C.J. and Karakatsanis, Rowe, Martin, Jamal, O'Bonsawin and Moreau JJ.] --- ### Dissenting Reasons ### Côté J. [Paragraphs 241–325: Dissenting reasons of Côté J.] [ 300 ] Although my colleague also acknowledges that Takuhikan was not entitled to a particular result at the end of the negotiations by virtue of the obligation to negotiate in good faith, respectfully, his conclusion suggests the opposite. In fact, confirming the quantum of damages claimed by Takuhikan amounts to granting it all of the funding requests that it made during the renewals. However, Takuhikan had accepted that Quebec's financial contributions did not fully meet its needs and that it would be required to assume any deficits. Concluding in this way amounts to rewriting the terms of the agreement entered into by the parties and to making the principle of the honour of the Crown a cause of action. [ 301 ] At the risk of repeating myself, Quebec was not required to fund the police force in a manner that would allow for the provision of services of the same quality as those provided to non‑Indigenous communities or to pay all of the costs of the police force. [ 302 ] It is true that Takuhikan made the decision to abolish its police force as of April 1, 2016, because of a lack of funding, a decision that was announced to Canada and Quebec in November 2015, but that was ultimately not carried out. However, a review of the circumstances surrounding that decision does not support a finding of abuse of right or dishonourable conduct on the part of Quebec during the renewal of the agreements. On the contrary, the evidence instead shows that, throughout their contractual relationship, including the period during which Takuhikan intended to abolish its police force, Quebec listened attentively to its counterparty's grievances and was flexible in seeking solutions to the problem of the underfunding of its police force. In that regard, Quebec proposed and implemented a variety of additional measures providing Mashteuiatsh's police force with financial support, which attest to the fact that Quebec's conduct was in compliance with the standards imposed by good faith and the principle of the honour of the Crown. It is essential to review these measures. #### (1) Quebec's Additional Measures To Support Mashteuiatsh's Police Force [ 303 ] I begin by noting that from 2006, Quebec contributed, up to a maximum amount of $743,208, to funding the construction of the community's police station (capital funding agreement under the Aboriginal Development Fund, reproduced in A.R., vol. XIV, at pp. 19‑25; loan repayment agreement of March 24, 2006, reproduced in A.R., vol. XIV, at pp. 126‑29). [ 304 ] In 2013, Quebec was well aware that Mashteuiatsh's police force was experiencing financial difficulties. Thus, in the 2013‑2014 fiscal year, Takuhikan was given $284,514 in additional financial support to be allocated to training and the purchase of equipment, including $136,567 from Quebec. It is important to bear in mind that this additional financial support was not taken from the funding envelope dedicated to the tripartite agreements, which was strictly limited by Parliament and the Assemblée nationale, but rather from other government programs. The testimony of Quebec's representative, Richard Coleman, shows that Quebec listened to the difficulties expressed by Takuhikan and was flexible and creative in finding alternative solutions (A.R., vol. XVII, at pp. 65-66). [ 305 ] In 2014, Quebec made efforts to help Takuhikan with the financial difficulties arising from the arbitration award rendered in July 2014 concerning a retroactive pay increase for the police officers of the Mashteuiatsh police force. Although the increase in government contributions proposed during the renewal of the tripartite agreement did not meet the needs expressed by Takuhikan (only 1.5 percent), Quebec and Takuhikan entered into subsequent agreements to reduce operational and management costs. In fact, Quebec loaned personnel from the Sûreté du Québec for two years to offset the elimination of a management position between 2013 and 2015, and gave Mashteuiatsh police officers access to the indoor firing range at the Sûreté du Québec headquarters in Chicoutimi (testimony of Richard Coleman, A.R., vol. XVII, at p. 63; testimony of Dannye Bonneau, A.R., vol. XV, at pp. 7 and 20‑21). [ 306 ] After Takuhikan announced the shutdown of its police force in November 2015, Quebec (Quebec alone, without Canada) and Takuhikan entered into a transitional agreement in March 2016 for the maintenance and provision of police services. That agreement provided for a fixed additional contribution of $400,000 that could be used [translation] "to cover any deficit related to the provision of police services in the community of Mashteuiatsh" (art. 4.1, reproduced in A.R., vol. XI, at p. 25). That agreement therefore gave Takuhikan considerable flexibility to lessen the impact of the deficits incurred in previous years. [ 307 ] At trial, Takuhikan essentially argued that the amount in that transitional agreement could not be deducted from the amount claimed because that contribution could have been used to absorb the deficits accumulated for periods that are now prescribed (testimony of Valérie Tremblay, A.R., vol. XVI, at p. 148). Yet, art. 3.3 of the transitional agreement states the following: [translation] "The parties agree that, at the conclusion of any complaint process or any other proceeding relating to the funding of the police force, the amounts paid under this agreement will be deducted from any amount that Quebec could be ordered to pay to the Council." Moreover, I note that art. 6.1 specifies the following: [translation] "The parties agree that the fixed additional contribution mentioned in article 2.1 of this agreement does not constitute recognition by Quebec of a recurring need for additional funding." [ 308 ] Finally, in 2017, an agreement providing for the payment of $375,000 at the rate of $125,000 per year, spanning the years 2016, 2017 and 2018, was entered into by the Ministère de la Sécurité publique and Takuhikan in connection with the Prévention Jeunesse funding program. One of that program's objectives is to support partner organizations, including Indigenous police forces, in order to prevent crime among Indigenous youth (A.R., vol. XIV, at p. 1). [ 309 ] In light of the foregoing, I cannot bring myself to describe these various measures as "supplemental assistance" as does my colleague, or even as a "Band‑Aid", to use the words of the representative of Canada in this regard (para. 227). I would like to emphasize here that these comments by Canada's representative are surprising, in a context where it is up to the federal government to ensure the majority of the funding to support First Nations self‑government as regards their police services. In any event, the argument that Quebec turned a deaf ear to Takuhikan's financial difficulties in maintaining its police force is not supported by the evidence. Therefore, the alleged abusive or dishonourable conduct of Quebec has not been established by Takuhikan. [ 310 ] I also disagree with my colleague's view that the additional financial support provided by Quebec cannot be considered in the assessment of its conduct, given that it is supposedly "outside" the contractual renewal mechanism of the agreements (para. 139). I find that Quebec went beyond what was required by the plain terms of the agreements, including the renewal clause, by providing these additional amounts to financially support Mashteuiatsh's police services. The additional financial assistance provided by Quebec to Takuhikan as part of their contractual relationship to maintain Mashteuiatsh's police force must be taken into account in the assessment of Quebec's conduct with respect to the renewal of the tripartite agreements and with respect to the injury that may have resulted from it. #### (2) Deference towards Takuhikan's Contractual and Financial Autonomy [ 311 ] I also cannot bring myself to conclude that Quebec's conduct during the renewal of the agreements was contrary to good faith because it apparently "exploited [the] position of weakness" (Kasirer J.'s reasons, at para. 137) of its counterparty or that this conduct was dishonourable because of "the precarious situation in which [Takuhikan] found itself" (para. 196; see also para. 10). With respect, such an approach completely ignores the capacity to act, the agency and the contractual and financial autonomy of Takuhikan, which, moreover, has not alleged any defect of consent with respect to the renewal of the agreements. [ 312 ] Takuhikan's contractual autonomy is particularly reflected in the free and informed choice it made to offer a level of service above the one provided for in the tripartite agreements, rather than terminate the agreements (Sup. Ct. reasons, at paras. 63‑69, in particular paras. 66‑68). The trial judge, who had the opportunity to examine the evidence in depth and to hear testimony, concluded that Takuhikan renewed the agreements [translation] "knowingly because of the fact that the level of funding [from the governments] is not commensurate with the quality of the service that [Takuhikan] wishes to provide to the member[s] of the Pekuakamiulnuatsh First Nation" (para. 67). As the trial judge noted, this is clear from a letter dated December 8, 2008 (P‑8), which states that the funding provided by Quebec at that time represented an [translation] "acceptable compromise considering [Quebec's] financial limitations and [Takuhikan's] concern for maintaining and developing a quality police force" (para. 67; A.R., vol. II, at p. 32). This finding of fact is entitled to deference. [ 313 ] The precarious situation described by my colleague totally disregards the financial autonomy Takuhikan had during the renewal of the agreements. In this regard, it is helpful to reproduce the remarks of Binnie J., who wrote on behalf of the majority in Moses, that agreements negotiated between government and Indigenous parties must be considered on the basis of the terms that the parties actually agreed to, particularly because they have the resources necessary to act the way they do: > In R. v. Badger, [1996] 1 S.C.R. 771, Cory J. pointed out that Aboriginal "[t]reaties are analogous to contracts, albeit of a very solemn and special, public nature" (para. 76). At issue in that case was an 1899 treaty. The contract analogy is even more apt in relation to a modern comprehensive treaty whose terms (unlike in 1899) are not constituted by an exchange of verbal promises reduced to writing in a language many of the Aboriginal signatories did not understand (paras. 52‑53). The text of modern comprehensive treaties is meticulously negotiated by well‑resourced parties. As my colleagues note"all parties to the Agreement were represented by counsel, and the result of the negotiations was set out in detail in a 450‑page legal document" (para. 118). The importance and complexity of the actual text is one of the features that distinguishes the historic treaties made with Aboriginal people from the modern comprehensive agreement or treaty, of which the James Bay Treaty was the pioneer. We should therefore pay close attention to its terms. [para. 7] [ 314 ] In the present case, Takuhikan's financial statements show accumulated budget surpluses totalling several million dollars. The trial judge concluded from the evidence that the council had own-source revenues that were much greater than its police force's deficit (para. 83). With all due respect to the Court of Appeal, no palpable and overriding error was demonstrated to warrant its intervention with respect to this finding of fact. [ 315 ] In addition, in its annual report for the 2014‑2015 fiscal year, Takuhikan stated the following: [translation] " . . . Pekuakamiulnuatsh Takuhikan reiterates the importance of remaining vigilant in this situation of an underfunding of programs and services and notes that the community has a solid own-source revenue base and [has] flexibility [under] certain funding agreements to achieve its financial objectives" (A.R., vol. XIII, at p. 19 (emphasis added)). Although the own‑source revenues do not necessarily reflect the flexibility Takuhikan actually had, it is important to mention that, as of March 20, 2013, they totalled $12,452,727 (testimony of Valérie Tremblay, A.R., vol. XVI, at p. 92‑93; A.R., vol. XIII, at p. 207). With respect, the contractual imbalance resulting from Quebec's conduct described by my colleague provides no basis for concluding that Quebec breached its obligations to act in good faith and honourably. [ 316 ] As I stated at the outset, given the responsibility incumbent upon Takuhikan to assume the deficits pursuant to the agreements and its approval regarding the scope of the funding provided by Quebec, it appears that, before this Court, Takuhikan is challenging Quebec's public policy decisions concerning the giving of financial support to Indigenous police forces. However, the role of the courts is not to interfere in this way in the budget decisions of government parties, which are reflected in the tripartite agreements at issue. Concluding otherwise has the effect of sanctioning a discretionary policy decision concerning the allocation of budgetary resources of the state, which is something the Court cannot do without brushing aside the separation of powers doctrine in doing so (Criminal Lawyers' Association of Ontario, at paras. 27‑31). #### D. Comments on the Remedy [ 317 ] Given my finding regarding Quebec's conduct, it is not necessary for me to determine the remedy to which Takuhikan would have been entitled. I will nonetheless say a few words on the approach suggested by colleague, about which, and I say so with all due respect, I have some serious reservations. [ 318 ] I am not convinced that it is necessary to create a remedial scheme based on "reconciliatory justice". I fail to see why the rules of corrective justice could not be adapted to consider the Indigenous perspective and the imperative of reconciliation when a court finds that the Crown has not acted in good faith and with honour in the context of a contractual relationship with an Indigenous party. [ 319 ] In my opinion, the civil liability regime already makes it possible to respect the objective of reconciliation through the principle of full compensation (that is, restitutio in integrum). Accordingly, I do not agree with the idea that reconciliatory justice "transcends the corrective justice at the heart of private law to make room for repairing and maintaining the special relationship with the Indigenous peoples on whom European laws and customs were imposed" (para. 148, citing Manitoba Metis Federation, at para. 67, and Haida Nation v. British Columbia (Minister of Forests), 2004 SCC 73, [2004] 3 S.C.R. 511, at para. 17). [ 320 ] Damages awarded for breach of the obligation of good faith (and, incidentally, for breach of the principle of the honour of the Crown) are generally compensatory in nature, in order [translation] "to restore an economic balance upset by the contracting party's breach" (Lluelles and Moore, at No. 2018). Injury can be compensated for if it is the logical, direct and immediate consequence of the alleged fault (art. 1607 C.C.Q.). Furthermore, in contractual matters, art. 1613 C.C.Q. provides that the debtor is liable only for damages that were foreseen or foreseeable at the time the obligation was contracted. If the fault committed is gross or intentional, the creditor will be entitled to all damages, including those that were not foreseeable at the time of the meeting of the parties' minds. [ 321 ] This exercise may pose some additional difficulties when it comes to remedying a breach of the principle of the honour of the Crown. Indeed, if the court chooses to resort to damages as appropriate compensation, identifying and precisely quantifying injury, such as the loss of a police force culturally adapted to the needs of the community, can sometimes be complex. That being so, these difficulties are nothing new for the courts, which have long been required to use their discretion in determining an indemnity that is fair and reasonable having regard to all the circumstances. Indeed, on an assessment of the injury involving largely unforeseeable or unquantifiable factors, courts must, in making this calculation, [translation] "rely on a certain amount of approximation and estimation, as well as [their] own discretion". In fact, [translation] "[u]ncertainty regarding the damage in itself must be distinguished from uncertainty caused by the difficulty of precisely measuring the damage because of the nature of the legal dispute, the realities of the proceedings, or the complexity of the facts". In other words, gaps in the evidence generally do not relieve the court from ruling on the quantum of damages. [ 322 ] The principle of the honour of the Crown is anchored in the objective of reconciliation between prior occupation of the land by Indigenous peoples and the Crown's assertion of sovereignty. It therefore seems entirely logical and coherent that when faced with a largely unforeseeable and unquantifiable injury resulting from dishonourable conduct by the Crown, the court may use its discretion to establish a quantum that will take into account restoring the honour of the Crown and achieving the objective of reconciliation. As regards corrective justice, nothing also prevents the court, in the exercise of its discretion, from giving consideration to the Indigenous perspective proposed by Robert Mainville, now a justice at the Court of Appeal of Quebec, in his work An Overview of Aboriginal and Treaty Rights and Compensation for Their Breach (2001), at p. 127, without it being necessary to create a new remedial scheme under the name "reconciliatory justice". Even though such is not the case at the determination of liability stage, I am of the opinion that the courts can be somewhat creative in exercising their discretion in order to quantify damages (Ontario (Attorney General) v. Restoule, 2024 SCC 27, at para. 277). This creativity must nonetheless be exercised within the principled legal framework, namely, that of corrective justice under Quebec civil law. [ 323 ] This more circumscribed approach also avoids the trap posed by the highly discretionary nature of the remedy anchored in reconciliatory justice in the case of a breach of the honour of the Crown demonstrated in a contractual context. It is important to bear in mind that agreements like those at issue help ensure predictability, stability and transparency in relationships between the Crown and Indigenous peoples. Accepting a remedial scheme that would allow courts to ignore provisions of agreements duly negotiated between the parties could discourage governments from signing these kinds of agreements with Indigenous entities. [ 324 ] It seems clear to me that the principles of corrective justice, when applied to the present case, cannot justify compensating Takuhikan for all of the deficits accumulated by its police force. Deduction should be made from the damages awarded to Takuhikan for the amounts paid by Quebec in 2014 and in 2016, the amount of the acquittance given under the transitional agreement, as well as any prescribed amount. If I had concluded that Quebec's conduct was dishonourable or contrary to good faith, I would have remitted the matter to the trial judge for consideration of the extent of the injury and of the causal connection. The government parties undertook to contribute financially to the maintenance of Mashteuiatsh's police force, not to all of its operational costs. In this regard, I agree with Quebec that the Court of Appeal could not fix the damages at an amount exactly equal to that of the deficits accumulated by Takuhikan, because, in any event, Takuhikan gave a contractual undertaking to assume those deficits and because the governments did not undertake to fund all of the costs generated by the police force. #### IV. Conclusion [ 325 ] For these reasons, I would allow the appeal and restore the trial judgment, with costs. --- Appeal dismissed with costs, Côté J. dissenting. --- ## Solicitors Solicitors for the appellant: Lavoie, Rousseau (Justice-Québec), Québec; Ministère de la Justice du Québec, Direction du droit constitutionnel et autochtone, Québec; Bernard, Roy (Justice‑Québec), Montréal. Solicitors for the respondent: Cain Lamarre, Roberval. Solicitor for the intervener the Attorney General of Canada: Department of Justice Canada, Montréal. Solicitor for the intervener the Attorney General of Ontario: Ministry of the Attorney General, Crown Law Office — Civil, Toronto. Solicitor for the intervener the Attorney General of Saskatchewan: Saskatchewan Ministry of Justice and Attorney General, Constitutional Law Branch, Regina. Solicitor for the intervener the Attorney General of Alberta: Alberta Justice, Constitutional and Aboriginal Law, Edmonton. Solicitors for the intervener the Assembly of First Nations Quebec-Labrador: Dionne Schulze, Montréal. Solicitors for the intervener the Congress of Aboriginal Peoples: Paliare Roland Rosenberg Rothstein, Toronto. Solicitors for the intervener the Assembly of Manitoba Chiefs: Fox, Calgary. Solicitors for the intervener the Indigenous Police Chiefs of Ontario: Falconers, Toronto. Solicitors for the intervener the First Nations Child & Family Caring Society of Canada: Burchell Wickwire Bryson, Halifax; Conway Baxter Wilson, Ottawa. Solicitors for the intervener the Okanagan Indian Band: JFK Law, Vancouver. Solicitor for the intervener the Assembly of First Nations: Assembly of First Nations, Ottawa. --- [^1]: English version available online: https://publications.gc.ca/collections/collection_2016/aanc-inac/R32-279-2004-eng.pdf.