Couchiching First Nation et al v. The Attorney General of Canada et al., 2025 ONSC 3602

Couchiching First Nation et al v. The Attorney General of Canada et al., 2025 ONSC 3602

COURT FILE NO.: CV-98-0743-00
DATE: 2025-06-17
ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:
Couchiching First Nation, Naicatchewenin First Nation, Nicikousemenecaning First Nation and Stanjikoming First Nation
Plaintiffs
M. McPherson, K. Hille, B. Brookwell, G. Cook and J. Shields for the First Nations Plaintiffs/Defendants by Counterclaim

- and -
The Attorney General of Canada, His Majesty the King in Right of Ontario and The Corporation of the Town of Fort Frances
Defendants/Plaintiffs by Counterclaim
J. Morse and D. Trafford for the Defendant/Plaintiff by Counterclaim, The Corporation of the Town of Fort Frances
C. Collins-Williams, T. Andreas and N. Sdieq for the Defendant by Counterclaim, The Attorney General of Canada
S. Davis, I. Kamal and S. Nestico-Semianiw for the Defendant by Counterclaim, His Majesty the King in Right of Ontario

HEARD: November 25, 26, 27, 28 and 29, 2024 at Fort Frances, Ontario
Justice: J.S. Fregeau

Table of Contents

• Overview
• Litigation Background
• Historical Background
• The Issues to be Determined
• The Positions of the Parties
  • The Town
  • The First Nations
  • Canada
  • Ontario
• Analysis of the Issues
  • 1. Is this an appropriate matter for summary judgment?
  • 2. Was the Agency One Reserve a Properly Created Reserve?
  • 3. Did the 1908 OIC convey the USL, or any portion thereof, to the Town by way of fee simple?
  • 4. Did Ontario’s 1908 OIC dedicate some or all the USL to the Town by way of a Public Trust?
  • 5. Have the Roads within the USL and/or the Point Park been dedicated for public use either by statute or at common law?
  • 6. Is the Town entitled to damages, as against Canada and Ontario, for breach of promise or agreement and/or for unjust enrichment in respect of capital improvements undertaken by the Town for the Point Park?
• Conclusion
• Costs

OVERVIEW

1The Corporation of the Town of Fort Frances (the “Town”), brings this motion for summary judgment on its counterclaim and crossclaims seeking a declaration that the Town is the legal and beneficial owner of lands surrendered by Couchiching First Nation, Naicatchewenin First Nation, Nicikousemenecaning First Nation and Stanjikoming First Nation (collectively the “First Nations”), to Canada on October 1, 1908 (the “1908 Surrender”), and which have never been sold (“Unsold Surrendered Lands” or “USL”). The USL are more particularly described later in these Reasons.

2In the alternative, the Town seeks an order that it is the legal and beneficial owner of the “1910 Park” and/or the “Point Park”, both located within the USL and more particularly described later in these Reasons, and all roads within the USL or that provide access thereto, to be used for park purposes.

3In the further alternative, the Town seeks an order declaring that it is entitled to a conveyance or conveyances of the USL, including, or in the alternative, the 1910 Park and/or the Point Park, and all roads within or that provide access thereto, for park purposes.

4In addition, or in the further alternative, the Town seeks an order declaring that it and/or its citizens hold a public interest in the USL, including, or in the alternative, the 1910 Park and/or the Point Park, and all roads within or that provide access thereto and which have been dedicated to the public for park purposes and that such lands are held and shall continue to be held indefinitely, in trust for, and subject to, the rights of the Town, its citizens and the public at large for its continued use for park purposes.

5In the event the court does not grant any of the relief sought by the Town and finds that one of the defendants by counterclaim is the legal or beneficial owner of the USL, the 1910 Park, the Point Park and/or the roads, then the Town seeks a trial to establish its right to damages and to determine the quantum of damages as sought in its counterclaim. The Town’s alternative claim for damages is against Canada and Ontario, firstly in the amount of $50,000,000.00 for “breach of promise and agreement, and/or breach of duty, and/or failure, neglect, and/or refusal to comply with” a 1908 Ontario Order-in-Council and secondly, in the amount of $2,000,000.00 as reimbursement for capital improvements undertaken by the Town within the USL, on the basis of unjust enrichment.

6The First Nations, the Attorney General of Canada (“Canada”), and His Majesty the King in Right of Ontario (“Ontario”), seek an order by way of summary judgment dismissing the counterclaim and crossclaims of the Town in their entirety, including the claim for damages.

LITIGATION BACKGROUND

7This action was initiated by the First Nations in 1998. In the original Statement of Claim, the First Nations sought damages from Canada for breach of fiduciary duty in relation to Canada’s alleged maladministration of the lands surrendered pursuant to the 1908 Surrender.

8Ontario and the Town were added as parties in 2007. In 2009, the Town issued a counterclaim against the First Nations, and crossclaims against Canada and Ontario, asserting legal and/or beneficial ownership of the USL or, in the alternative, legal and/or beneficial ownership of the 1910 Park and/or the Point Park.

9On March 13, 2018, the First Nations settled their claim against Canada and Ontario and the action was dismissed as against these defendants. On December 18, 2018, the First Nations were granted leave to discontinue the action against the Town on terms, including that the First Nations be prohibited from commencing any future action or proceeding against Canada, Ontario, or the Town upon claims or causes of action alleging that the 1908 Surrender was legally or equitably invalid or otherwise ineffective.

10The only extant issues in this litigation are those raised in the Town’s counterclaim against the First Nations and crossclaims against Canada and Ontario.

HISTORICAL BACKGROUND

11On October 3, 1873, Canada entered into a treaty with the Anishinaabe peoples in the Rainy Lake and Rainy River area of what is now the Province of Ontario. The treaty was known as the Northwest Angle Treaty, or Treaty No. 3 (hereinafter referred to as “Treaty 3”). Treaty 3 was negotiated on behalf of the Government of Canada by two Commissioners, Mr. Simon Dawson (“Dawson”) and Mr. Robert Pither (“Pither”). Canada confirmed Treaty 3 by Order-in-Council on October 31, 1873. The First Nations are descendants of four of the Anishinaabe treaty signatories.

12Treaty 3 provided for the surrender to the Crown by the First Nations of the lands covered by the treaty, comprising approximately 55,000 square miles and including lands in the Rainy Lake and Rainy River area which are the subject of this action. In exchange, the Crown promised, among other things, to lay aside reserves for the benefit of the First Nations.

13The promised reserves were neither described nor set aside under the treaty. Pursuant to the Crown’s reserve creation obligation in Treaty 3, Dawson and Pither were appointed by Order-in-Council dated July 8, 1874 (“1874 OIC”), to confer with the First Nations regarding the creation of the reserves. In 1875, Dawson provided a report dated December 31, 1874 on the proposed reserves to the Governor General in Council, including Reserve No. 1, which came to be known as the “Agency One Reserve”. Reserve No. 1 was described as follows:

At the foot of Rainy Lake, to be laid off as nearly as may be indicated on the plan. Two chains in depth along the shore of Rainy Lake and the bank of Rainy River, to be reserved for roads, right-of-way to lumbermen, booms, wharves, and other public purposes.

This Indian reserve not to be for any particular chief or Band, but for the Saulteuse tribe, generally, and for the purpose of maintaining thereon an Indian Agency generally with the necessary grounds and buildings.

14On February 27, 1875, Canada provisionally approved the Treaty 3 reserves, including the Agency One Reserve, by Order-in-Council (“1875 OIC”). The Agency One Reserve was surveyed for Canada by E.C. Caddy (“Caddy”), a Dominion Land Surveyor, between August 3 and 9, 1875. The Agency One Reserve was originally approximately 170 acres.

15Pither was appointed as the local Indian Agent and agency buildings were constructed on the southernmost tip of the reserve, adjacent to where Rainy Lake flows into Rainy River. These lands became known as “Pither’s Point”. The Agency One Reserve was used by the First Nations as an agency reserve only until approximately 1882.

16C.C. Forneri (“Forneri”), also a Dominion Land Surveyor, was employed by Canada to survey the Township of McIrvine and the Rainy River reserves. He began this work in September 1875 and completed it in March 1876. The Township of McIrvine, later incorporated into the Town, was established in 1891. It was located adjacent to, and west of the Agency One Reserve.

17Forneri’s Plan of Township of McIrvine, No. 5 S. Range (the “Forneri Plan”), indicates that it was surveyed by Forneri on October 15, 1875 and that the plan was approved and confirmed by the Dominion Lands Office Surveyor General on August 18, 1876. The Forneri Plan appears to have roads and road allowances running through the Agency One Reserve lands. On March 25, 1886, Ontario passed The Rainy River Free Grants and Homesteads Act, 1886. This act “adopted and legalized” townships that had been surveyed in the Rainy River District.

18At the time Treaty 3 was signed, and the Agency One Reserve set aside, Canada and Ontario were embroiled in a dispute as to the location of Ontario’s western boundary. Canada asserted that Ontario’s western boundary was east of Rainy Lake and that the lands in issue in this action were outside of Ontario and within the Northwest Territories. The dispute was resolved by the Boundary Award decision of the Judicial Committee of the Privy Council (“JCPC”), dated August 11, 1884 and the Canada (Ontario Boundary) Act, 1889, 52-53 Vict., c. 28 (U.K.). This legislation confirmed that Ontario’s boundaries were, and had been since 1867, north and west of Rainy Lake and Rainy River. The new boundary encompassed within Ontario a large tract of Treaty 3 lands which had been previously surrendered by the First Nations, as well as reserves which had been set aside by Canada pursuant to Treaty 3.

19Ontario and Canada each claimed a beneficial interest in the lands surrendered in Treaty 3. The dispute went to the JCPC for resolution. In 1888, the JCPC held, in St. Catherine’s Milling and Lumber Company v. The Queen, (1888) 14 App. Cas. 46 (UK JCPC), that upon the signing of Treaty 3, s. 109 of the Constitution Act, 1867 operated to vest in Ontario the entire beneficial interest of the Crown with respect to all lands within Ontario’s boundaries, as surrendered to the Crown in Treaty 3.

20Following St. Catherines Milling, uncertainty remained as to the status of the lands within Ontario that Canada had already set aside as reserves pursuant to Treaty 3. Canada and Ontario entered negotiations in which Canada sought Ontario’s concurrence regarding the Treaty 3 lands that had been surveyed by Canada for the establishment of Indian Reserves, including the Agency One Reserve. Ontario sought information concerning the location and extent of the intended reserves.

21These negotiations led to the enactment of reciprocal federal-provincial legislation in 1891: An Act for the Settlement of Questions between the governments of Canada and Ontario respecting Indian Lands, S.O. 1891, c. 3 (54 Vic. c.3) and An Act for the settlement of certain questions between the Governments of Canada and Ontario respecting Indian Lands, S.C. 1891 c. 5 (54-55 Vic., c.5) (collectively the “1891 Legislation”). The 1891 Legislation authorized the making of a formal agreement with respect to reserves already selected and set aside by Canada, within Ontario, prior to the settlement of the Ontario boundary issue.

22The 1891 Legislation was followed by a statutory agreement between Ontario and Canada dated April 16, 1894, entitled “Agreement Re Indian Lands” (the “1894 Agreement”). The relevant portions of the 1894 Agreement are as follows:

2. That to avoid dissatisfaction or discontent among the Indians, full enquiry will be made by the Government of Ontario as to the reserves heretofore laid out in the territory, with a view of acquiescing in the location and extent thereof unless some good reason presents itself for a different course.

3. That in case the government of Ontario after such enquiry is dissatisfied with the reserves or any of them already selected, or in the case other reserves in the said territory are to be selected, a joint commission or joint commissions shall be appointed by the Governments of Canada and Ontario to settle and determine any question or all questions relating to such reserves or proposed reserves.

4. That any future treaties with the Indians in respect of territory in Ontario to which they have not hitherto surrendered their claim aforesaid, shall be deemed to require the concurrence of the Government of Ontario.

23It is not in dispute that no such joint commission was ever established.

24On July 7, 1902, during the appeal to the JCPC of Ontario Mining Company v. Seybold, [1902] J.C.J. No. 2, (“Seybold”), legal counsel for Canada and Ontario entered into an agreement (the “1902 Agreement” or the “Blake-Newcombe Agreement”). The 1902 Agreement was intended to address on a broader, “go-forward basis”, the issue before the JCPC in Seybold – which emanation of the Crown had the authority to grant an interest in “Treaty Indian Reserves in Ontario (including those in the territory covered by [Treaty 3] which are or shall be duly established pursuant to the [1894 Agreement]) and which have been or shall be duly surrendered by the Indians to sell or lease for their benefit”.

25The Blake-Newcombe Agreement includes the following terms:

1. Ontario agrees to confirm the titles heretofore made by the Dominion;
2. The Dominion shall have full power and authority to sell or lease and convey title in fee simple or for any less estate; and
3. Nothing is hereby conceded by either party with regard to the constitutional or legal rights of the Dominion or Ontario as to the sale or title to Indian Reserves or precious metals or as to any of the contentions submitted by the cases of either Government herein but it is intended that as a matter of policy and convenience the Reserves may be administered as hereinbefore agreed.

26In Seybold, at para. 12, the JCPC expressly acknowledged and endorsed the principles set out in the Blake-Newcombe Agreement:

By s. 91 of the British North America Act, 1867, the Parliament of Canada has exclusive legislative authority over “Indians and lands reserved for the Indians”. But this did not vest in the Government of the Dominion any proprietary rights in such lands, or any power by legislation to appropriate lands which by the surrender of the Indian title had become the free public lands of the province as an Indian reserve, in infringement of the proprietary rights of the province…let it be assumed that the Government of the province, taking advantage of the surrender of 1873, came at least under an honourable engagement to fulfill the terms on the faith of which the surrender was made, and, therefore, to concur with the Dominion Government in appropriating certain undefined portions of the surrendered lands as Indian reserves. The result, however, is that the choice and location of the lands to be so appropriated could only be effectively made by the joint actions of the two Governments.

27The Town was incorporated in 1903. The Town was and is located adjacent to the Agency One Reserve. Shortly after the Town was incorporated, it began lobbying both Canada and Ontario for land out of the Agency One Reserve for a municipal park. In general terms, the initial response of both Canada and Ontario was that until the matter of the reserves had been resolved nothing could be done.

28Canada’s position in response to the Town’s request is reflected in correspondence from the then Deputy Superintendent General of Indian Affairs Canada, Frank Pedley (“Pedley”), to A.E. Dyment, Member of Parliament, dated March 8, 1904:

In reply, I would say that Pither’s Point is what is known as Indian Reserve No. [1], containing 170 acres and was set aside under Treaty No. 3, made with the Indians in 1873…it was the site for the Indian Agency and as a general Reserve for Indians when visiting the Agency.

This and other reserves set aside under Treaty No. 3, located in what was formerly known as the disputed territory have not been confirmed as such by the Ontario Government, and the Department is, therefore, unable to deal therewith.

29In 1906, the Town applied to Frank Cochrane, Minister of Lands, Forests and Mines for Ontario (“Cochrane”), for land out of the Agency One Reserve for a park. Cochrane provided Ontario’s position on the issue to the Town Mayor in correspondence dated October 25, 1906:

…in reference to the application of the Town of Fort Frances for Pither’s Point for park purposes…you will see that this point is in dispute between the Dominion and the Ontario Governments. We are endeavoring to arrange this dispute, but in the meantime, I regret that it will not be possible to do anything in this matter.

30On July 24, 1907, Cochrane pursued the issue in correspondence to Frank Oliver, Canada’s Minister of the Interior (“Oliver”). Cochrane expressed Ontario’s position in relation to reserve land in the Rainy River District generally, and in relation to the Agency One Reserve specifically:

I have just returned from a trip to the Rainy River District where I have been hearing the views of the settlors as to what might be done to improve their position and surroundings. Among other things I found that people complained a good deal of the large areas of agricultural land that are locked up by Indian Reserves, and that the continuity of settlement is broken by these Reserves having no colonization roads through them.

I am sure that you will agree with me that it is a pity to retard growth and prosperity of the settlement in that region by keeping these large areas locked up as Indian Reserve, especially as the Indians are few in number, and will never cultivate the land to any great extent.

… I would be glad to know that I have your active sympathy in this matter, and that you will recommend to the Government of Canada the taking of surrenders of these Reserves, and opening them up for sale to actual settlers.

At what is known as Pither’s Point there is an area of which is considered suitable for Park purposes, and the Town of Fort Frances is very anxious to obtain a portion of this Reserve to be used for that purpose. Might I ask your attention to this matter with a view to your consenting to the Town getting what it may require for Park purposes.

31On July 26, 1907, having considered Cochrane’s report on his trip to the Rainy River District, Ontario approved an Order-in-Council (“Ontario’s 1907 OIC”), which stated the following:

… the Committee of Council advise that the consent of the Province of Ontario be given to the surrender to the Dominion of Canada, and the sale to actual settlers of the following Indian Reserves in the District of Rainy River pending the settlement of the whole reserve question and without prejudice to any rights the Province may have in the matter; Reserve No. 1 at Pither’s Point at outlet of Rainy Lake…

32Canada did not immediately seek a surrender of the Agency One Reserve lands. Canada’s position is reflected in correspondence from Pedley to James Conmee, Member of Parliament, dated July 8, 1908, in reference to the Town’s request for a portion of the Agency One Reserve for park purposes:

… I have to inform you that the matter cannot be dealt with at once and solely by this Department. As you are aware, the reserve was set aside under Treaty No. 3, and the reserves located for the Indians of this treaty have not been confirmed by the Government of the Province of Ontario. As a preliminary step Ontario should confirm the location of the reserve in question, after which this department could take necessary action.

I may say that this Department is anxious to further the accomplishment of the purpose which the Town of Fort Frances has in view, subject, of course, to safeguarding the Indian interest in this land. I feel free to say that if the Government of the Province of Ontario would pass an Order-in-Council confirming the Reserve No. 1 at Pither’s Point this Department will endeavour to obtain from the Indian owners of the property a surrender to the Crown in order that the necessary lands may be sold as a park for the Town of Fort Frances at a fair price to be fixed.

33Pedley’s position on behalf of Canada was apparently communicated to the Town’s Mayor and then to Ontario, resulting in Aubrey White (“White”), of the Ontario Department of Lands, Forests and Mines, responding to Pedley by letter dated July 11, 1908:

Mr. Williams, the Mayor of Fort Frances, called on me today in connection with the Pither’s Point Reserve, which the Town of Fort Frances is anxious to get for park purposes. He said that before your department could deal with the matter, we must pass an Order in Council vesting the Reserve in the Dominion Government for the Indians. I was under the impression we had already done this. I am sending you herewith copy of an Order in Council passed on the 26th July, 1907, in which we gave consent to the surrender to the Dominion Government by the Indians of all the Reserve on the Rainy River to be opened for sale to actual settlers. I am also sending you copy of a letter dated the 24th July, 1907, addressed by my Minister [Cochrane] to the Honourable Frank Oliver, the last paragraph of which deals with Pither’s Point. Why I do not know, but the fact remains that Mr. Oliver never answered the letter of my Minister.

We are very anxious to assist the Town in getting this Park, and if you will say exactly what form you require the Order in Council to be in in order to enable you to deal with the matter, I will bring it before the Minister and get the necessary order passed, as he is only too anxious to do what the Town asks. Please let me hear from you as soon as possible, as I am going on my holidays in a few days.

34On July 13, 1908, Pedley responded to White’s July 11, 1908 letter and provided the following draft wording for an Ontario Order-in-Council:

I think the wording of the implementing clause in the Order-in-Council should be somewhat as follows:

“That the Committee of Council advise that the consent of the Province of Ontario be given to the surrender to the Dominion of Canada to dispose of that portion of Reserve No. 1 at Pither’s Point required for park purposes by the Town of Fort Frances pending the settlement of the whole reserve question without prejudice to any right the Province may have in the matter.”

So soon as this Department has received your Order-in-Council it will place the matter in the hands of its Agent with a view to obtaining a surrender from the Indians which is a necessary preliminary procedure.

35On September 4, 1908, Ontario approved the following Order in Council (the “1908 OIC”):

Upon consideration of the memorandum of the Deputy Minister of Lands and Forests dated 1st September 1908 and upon the recommendation of the Honourable Minister of Lands and Forests and Mines the Committee of Council advise that consent be given to the government of Canada granting such part of Pither’s Point Indian Reserve as may be asked for by the Town of Fort Frances for Park purposes.

36The parties to this motion agree that the 1908 OIC has never been revoked.

37Also on September 4, 1908, Pedley wrote to the Town’s Mayor advising him that as soon as he received a copy of the 1908 OIC, Canada would “take immediate steps to obtain a surrender from the Indians.” Pedley noted that “the question of the amount to be paid for this land has not yet been decided but that is a matter which can be adjusted later on.”

38On October 1, 1908, the predecessors of the First Nations surrendered approximately 114 acres of the Agency One Reserve (the “1908 Surrender”) on the following terms:

To Have and To Hold unto His Majesty the King… in trust to sell the same to such person or persons, and upon such terms as the Government of the Dominion of Canada may deem most conducive to our welfare and that of our people.

And upon the further condition that all moneys received from the sale thereof shall… be placed to our credit and interest thereon paid to us, in the usual way.

Reserving, nevertheless, the right to the various Bands now entitled to hold a general meeting on the lands hereby surrendered, to hold any future gatherings thereon.

39On October 12, 1908, Indian Agent for the Fort Frances area, John Wright (“Wright”), provided the signed 1908 Surrender to the Secretary of the Department of Indian Affairs and advised as follows:

As I am not aware of what portion, if any, the Department proposes giving to the town for park purpose and understanding that they have applied for the whole reserve, I would suggest that only the sixty odd acres applied for by them some years ago be given, and the balance of the land excepting that on the south side of the railway, be subdivided into quarter acre lots and sold, for which I think there would be a ready sale at good prices, if sold say next summer. The land on the south side of the railway consists of a grove, and should be kept as it is, as a camping place for the Indians and general public.

40Canada accepted the 1908 Surrender by Order-in-Council dated November 14, 1908.

41On November 26, 1908, Pedley wrote to Wright advising him that the 1908 Surrender had been accepted and that the Department of Indian Affairs was now in a position to “make disposition of part thereof to [the Town]”. Pedley asked Wright “to report as early as possible what price per acre you consider the [Town] should pay for this land, and what portion should be granted”. Wright replied on December 18, 1908, as follows:

… relative to the disposition of the Agency Reserve at Pither’s Point, I have the honour to state that, as I understand this land was set aside for an agency and general camping reserve for the Rainy Lake Indians and the Ontario Government has waived any rights they may have to the [Town], for the purpose of it being set aside for a park for the [Town], my views are that the Department grant the [Town] the sixty odd acres they applied for two years ago, provided they give the Department suitable land in the town for agency buildings exempt from taxation, and that the balance of the land, except that on the south side of the railway tracks, be subdivided in suburban lots and sold, for the benefit of the Indians interested. The land on the south side of the railway consists of a beautiful grove, and should be kept as it is, as a camping place for the Indians and general public, and could either be given to the [Town], or held as it is, probably it would be better to let the [Town] have it.

42On January 5, 1909, J.D. McLean, Secretary, Department of Indian Affairs (“McLean”) replied to Wright as follows:

With reference to your suggestion that the said land be given to the Town, for the reasons stated in your letter I have to say that this Department has the same control over the Agency Indian Reserve that it has over any other Indian Reserve in its neighborhood. It does not see its way to make a gift of any portion of the said land…you should make a careful valuation of the land desired by the [Town] and of the lot or lots the [Town] desires to transfer to the Department.

43On June 25, 1909, McLean wrote to W.H. Elliot, Town Clerk, and advised as follows:

I am directed to request the [Town] to pay to this Department the value of the land required in the Fort Frances Indian Agency Reserve before permission can be granted to enter upon and improve the said land.

44The Town Mayor responded to McLean on August 2, 1909:

Re your letter of June 25 in regard to Pither’s Point Park site, would say that up to the date of this letter, your Department has not informed the Town as to any specific value or terms on which the land asked for would be granted the [Town]. We will be pleased to receive this information at your earliest convenience.

To refresh your memory I might state that the last request of the Town was for the balance of Pither’s Point Reserve not already granted for Indian School or Railroad purposes, about 100 acres. This land to be held and used for Park purposes and the Indians still to have the right to hold meetings thereon if the Agent considered it desirable they should do so, also the Town was to furnish a suitable site in the Town for the erection of Agency buildings. We considered that as the Town would only have the land for Park purposes, would have to stand all expense of improving this wild land, would only hold their right while using it for park purposes and the Indians still retaining the right to use it for the purpose for which it was originally set aside, we consider we should only be asked to pay a nominal amount.

I would further call your attention to the fact that the Ontario Government only surrendered any rights they might have in the land on the understanding that it was to be granted to the [Town] for park purposes.

45On December 17, 1909, Pedley wrote to Oliver, reminding him of the background facts and expressing his view of the situation:

You will remember that the [Town] has been urging the Department to set aside a certain area of the land known as Pither’s Point which is held as an Indian Reserve for the use of the Town of a Park. Desiring as far as possible to meet the wishes of the [Town] the department obtained from the Indians a Surrender pro forma of the land to be disposed of for their benefit. The Ontario Government on the 4th of September 1908 gave consent that the Dominion Government should grant a portion of Pither’s Point for Park purposes. This was necessary as the Ontario Government has not yet confirmed the title of the Reserves in Treaty No. 3. The [Town] wishes to obtain the use of this land free of cost and has offered the Department a free site for an Agency residence and office within the Town, with exemption from taxation, and is willing to accord to the Indians their old camping privileges on the Park Reserve…after carefully considering this question I think it would be well not to complicate the matter by accepting from the [Town] a free site with exemption from taxation, but to grant them a lease for a long term at a fixed rate.

46Canada provided its position to the Town by way of correspondence dated January 25, 1910, from the Assistant Secretary, Department of Indian Affairs to the Town Clerk:

With reference to the desire expressed by [the Town] to acquire a portion of Pither’s Point for park purposes, I beg to say that after due consideration as to the value of the land, and the necessity of conserving the Interests of the Indians, the Department has decided to place the value at $750.00 an acre. The full price of the 60 acres required approximately for the Park is therefore $45,000.00. In the event of the town leasing the land the annual rent would be $1350.00, which represents 3% on $45,000.00, the amount which the Indians [illegible] for the purchase price as a government deposit.

47On May 18, 1910, the Town entered into a lease with Canada for 60 acres of the surrendered Agency One Reserve “to be used for park purposes only for and during the term of 99 years” at an annual rent of $1.00 per acre (the “1910 Lease”). This is the “1910 Park” referred to in para. 2 hereof. In the 1910 Lease, Canada and the Town expressly agreed that “the various Bands of Indians now or hereafter entitled to hold meetings and camp on Pither’s point shall have the right during the continuance of this lease to camp and sell wares, free of charge, within the limits of the land hereby leased.” Pursuant to the 1910 Lease, the Town established a park (the “1910 Park”). The expiry date for the 1910 Lease was April 30, 2009.

48The 1910 Lease was renegotiated and on September 26, 1927, Canada and the Town signed a second lease (the “1927 Lease”) reducing the acreage of the park to approximately 36.4 acres, this being the present day “Point Park” referred to in para. 2 hereof. The expiry date for the 1927 Lease remained at April 30, 2009. The balance of the acreage from the 1910 Park was leased to the local golf course.

49By internal memo dated July 11, 1910, George Yates, Minister’s Secretary, Ontario Department of Lands, Forests and Mines, wrote to White regarding the terms of the 1910 Lease:

The Indian Department is charging a dollar an acre a year rental. This province relinquished its rights to this land on the understanding that a grant would be made to the [Town], and the Minister does not propose that the Department of Indian Affairs should derive a revenue from land which was in dispute between the Dominion and this Province. We therefore wishes you to draft another Order-in-Council revoking the previous Order which embodies the consent of the Province. We also wishes you to write Ottawa setting forth our reasons for doing so.

50On July 13, 1910, White wrote to Pedley as follows:

The Department is in receipt of a copy of the lease granted by your Department to the [Town] for a part of Pither’s Point Indian Reserve, for park purposes. The lease dated the 19th of May, 1910, and the annual rent is $60. Per year, $1. per acre.

The Minister directs me to remind you that when the consent of this Government was given by Order-in-Council of the 4th of September 1908, to your Department, granting to the Town that part of the Reserve for park purposes, it was on the expectation that the price or rental, if leased, would be merely nominal, but your Department is charging a pretty heavy rental, viz.; - $1. per acre per annum.

The Minister is disposed to recommend the rescinding of the Order-in-Council of the 4th of September, 1908, but before doing so I am writing to know why the rent was made so high, and if you cannot see your way to making it merely nominal.

51On January 31, 1912, White followed up on this by letter to McLean, repeating the contents of his July 13, 1910 letter to Pedley and noting that no substantive reply had yet been received from Canada.

52In 1915, Ontario passed An Act to confirm the title of the Government of Canada to certain lands and Indian Lands, S.O. 1915, c. 12 (the “1915 Act”), pursuant to which all Treaty 3 reserves, but for Indian Reserve 24 C, were transferred from Ontario to Canada. The 1915 Act provides as follows:

Whereas under a treaty known as “The Northwest Angle Treaty, No. 3” certain Indians surrendered to Her late Majesty Queen Victoria all their rights, titles and privileges to the lands therein defined and described, out of which reserves were to be selected and laid aside for the benefit of the said Indians; and whereas after the true boundaries of Ontario had been ascertained and declared it was found that certain of the reserves selected and laid aside were within the said boundaries; and whereas in pursuance of the terms of an agreement dated 16th April 1894, between the Government of Canada and the Government of Ontario, the Government of Ontario has made full enquiry as to the said reserves so laid out, and it has been decided to acquiesce in the location and extent thereof with the exception of that known as Indian Reserve 24C, in the Quetico Forest Reserve, and subject to the modifications and additional stipulations of said agreement hereinafter set forth; and whereas the government of Canada has deposited in the Department of Lands, Forests and Mines of Ontario plans of said reserves:

Therefore His Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

1. The said reserves as shown on said plans, with the exception of Indian Reserve 24C, in the Quetico Forest Reserve, are hereby transferred to the Government of Canada, whose title thereto is hereby confirmed, and subject to all trusts, conditions and qualifications now existing respecting lands held in trust by the Government of Canada for Indians, and subject to the provisions of the following sections.

2. ….

3. The area of the said reserves so transferred has been computed and settled at 20,672 acres, and payment therefore at $1 per acre, being the sum of $20,672, is to be made by the Government of Canada to the Government of Ontario.

53Pursuant to an Ontario MNR Indian Land File document entitled “Indian Reserves in Treaty No. 3 Within the Former Limits of the Province of Ontario”, on which the calculation and payment noted above were based, the total acreage of reserves in Ontario was determined to be 330,589 acres, including the Agency One Reserve at 170 acres.

54In 1916, Ontario Land Surveyor D.J. Gillon (“Gillon”) surveyed 26 subdivision lots within the area of the Agency One Reserve surrendered pursuant to the 1908 Surrender (the “Idylwild Subdivision”). Gillon’s Plan of Subdivision of Part of Indian Reserve No. 1, SM88 (the “Gillon Plan” or “SM88”), dated November 24, 1916, also identified roads within the area surveyed, including The Avenue (now Idylwild Drive), School Road, Mill Road, Lake Road and Rainy River Colonization Road. In 1920, Canada sold the 26 subdivision lots located within the Idylwild Subdivision. The parties are not challenging the validity of the sale of this land.

55In 1924, Canada and Ontario passed reciprocal legislation entitled An Act for the settlement of certain questions between the Governments of Canada and Ontario respecting Indian Reserve Lands, S.C. 1924, c.48 and S.O. 1924, c.15 (the “1924 Legislation”).

56The final paragraph of the preamble to the 1924 Legislation states that the governments of Canada and Ontario entered into the 1924 Legislation “in order to settle all outstanding questions relating to Indian Reserves in the Province of Ontario.” Section 9 of the 1924 Legislation provides as follows:

Every sale, lease or other disposition heretofore made…under the direction of the Government of Canada of lands which were at the time of such sale, lease or other disposition included in any Indian Reserve in Ontario, is hereby confirmed…

57It is not in dispute that the Town paid the rent required by the 1910 Lease and 1927 Lease. It is also not in dispute that the Town, during the terms of the leases and upon receipt of requests from third parties to use the lands for purposes other than a park, submitted those requests to Canada for approval, and Canada, in turn, sought the consent of the First Nations. Examples of such requests include the following:

1. December 16, 1925: The Town Clerk wrote to the Superintendent General of Indian Affairs advising that an application had been made to the Town, “the Lessee of Pither’s Point Park”, by a party seeking to lease approximately four acres of the Park for the purpose of building a summer tourist lodge. The Town sought approval for a sublease and stated that the Town “assures you that any sub-lease… entered into will conform in every respect with the requirements of the lease made between the Department of Indian Affairs and the Town of Fort Frances, dated May 18, 1910;”
2. 1927: 23.6 acres of the 60-acre 1910 Park lands were leased to a private club for a golf course. The Town signed a new lease (the “1927 Lease”) for the remainder of the original 60 acres without objecting to the removal of the 23.6 acres;
3. 1930: The Town sought and received approval from the Department of Indian Affairs for permission “to cross Pither’s Point Park” with two 12 inch watermains;
4. 1944: The Town sought and received approval from the Department of Indian Affairs to permit a local radio station to erect two wooden poles for antennae in the park;
5. 1954: The Ontario Minnesota Pulp and Paper Company sought the Town’s permission to use the Park to dump pulpwood. Approval was sought and received from the Department of Indian Affairs, with the consent of the First Nations, restricted to the months of December to May so as not to interfere with the First Nations use of the land for camping purposes;
6. 1960: The Town received an application from a franchisee to sublease a portion of the Park property to build a Dairy Queen. In its letter to Canada seeking approval, the Town acknowledged that the “use of the property… is restricted to park purposes, [the Town] respectfully solicit the approval of [Indian Affairs] to permit rental of the above property. Canada sought a Band Council Resolution before agreeing to the sublease and the Town agreed to turn the proceeds of the rental over to Indian Affairs by means of an increase in annual rent;
7. 1963: The Town applied to Indian affairs for an easement to extend their water distribution system into Point Park;
8. 1973: In a meeting between the Town council and representatives of the First Nations to discuss the First Nations proposal for a new lease, the Town proposed purchasing the Pither’s Point. The First Nations declined and the Town Mayor explained that “if the Bands did not wish to sell, the Council was not interested in breaking the lease”.

58On April 8, 1984, the Town passed a resolution to petition Canada and Ontario to “acquire Pither’s point Park for historical purposes” and the Town agreed to maintain such park in perpetuity. By correspondence dated April 30, 1984, a copy of this resolution was sent to J.C. Munro, federal Minister of Indian Affairs, with copies to the Ontario Ministers of Northern Affairs and Natural Resources. On October 10, 1984, the Town reiterated this proposal to Canada and Ontario.

59On November 23, 1984, David Crombie, Minister of Indian Affairs, responded to the Town’s proposal and advised the Town that Canada could not consider the proposal because it was “unacceptable to the four Agency Reserve No. 1 Bands”.

60When the 1927 Lease expired on April 30, 2009, Canada advised the Town that it did not intend to renew the lease with the Town. The Town was further informed that Canada intended to return the Agency One Reserve lands to the First Nations. The Town obtained a preservation order from the court on April 27, 2010 (the “Preservation Order”), which requires that the parties maintain the status quo pending a determination of the Town’s counterclaim. As noted previously, on March 13, 2018, the First Nations settled their claim as against Canada and Ontario.

[The remainder of the decision continues with the detailed legal analysis and findings as set out in the original reasons, with all section and paragraph numbers preserved and all content verbatim, formatted for clarity and readability.]

Released: June 17, 2025

Justice J.S. Fregeau