Supreme Court of Canada –  5 S.C.R. 239
The Aboriginal title is extinguished at the moment of cession of Aboriginal lands to the Crown.
Do formerly Indian lands continue to be non-taxable after being sold?
Majority decision—3 vs. 2: Once sold, Indian lands become “regular” lands and can be taxed.
Between: Richard Church
And: William John Fenton
In 1854, the Saugeen and Owen Sounds First Nations surrendered their lands situated in the County of Grey to the Crown.
In 1857, a lot that was part of the previously surrendered lands was sold by the Ontario government (which had ownership of the Crown lands within its boundaries) to Richard Church, a settler. The instalments of the settler’s payment began in 1857.
In 1870, Church’s lands (except for two acres) were sold by the Warden and Treasurer of the County of Grey to David Keltie for arrears of taxes due for the years 1864 to 1869. The warrants for the sale were signed by the Warden and authorized by the Treasurer. The Warden then made a list of the lands sold without authenticating it with his signature and the County’s seal.
In 1873, William Fenton purchased the lands from David Keltie along with the remaining two acres.
In 1877, Church filed an action of expropriation against Felton to recover possession of his previously owned lands.
Church: The sale for taxes was not legal. The lands in question are Indian lands, and by their nature are not taxable. Since they could not be taxed in the first place, the sale for arrears of taxes is void.
Fenton: The surrendered lands are no longer Indian lands. The statutes contained no tax exemption for previously Indian owned lands; therefore the lands in question are liable to be sold for taxes.
The Court of Common Pleas (1878): Indian lands are Crown lands, which makes them liable to local taxation. They can be seized and sold for arrears of taxes.
The Court of Appeal for Ontario (1879): dismissed the appeal and maintained the decision of the Court of Common Pleas.
Ritchie, Tashereau, Gwynne
The lands in question were not Indian lands because the Indian title (which was exempted from taxes) was extinguished in 1854 when the lands were surrendered to the Crown.
They became regular Crown lands, making them liable to taxation.
The Crown was the Indians’ trustee, meaning that it provided the Indians with protection, and gave them a right to occupancy and a tax exemption over their traditional lands in exchange for ownership over them. If the Crown decided to sell parts of their lands, it had to be in the nation’s best interest and the proceeds would have to benefit the nation.
As Canada’s Indian policy was becoming more and more costly, the government tried to finance it in new ways. One of these ways was to send the Dominion’s agents to intimidate the Indian tribes into waiving their title over the lands, so that the Crown could later sell them to settlers. Once the lands were free of their Indian title, they were now subject to taxation.
Even though the nation benefited from the proceeds of these multiple sales, the main beneficiaries were the settlers, who acquired these lands for a fraction of their real value, and the province, which could then tax them. In Ontario, it is estimated that the Six Nations Grand River lands were reduced to 10% of their original size. The Indians’ living conditions deteriorated as they were increasingly deprived of their traditional fishing and hunting grounds, leaving them without resources to support themselves.
Clark Bruce A. 1999. Justice in Paradise, Vol. 20, coll. McGill-Queen’s Native and Northern Series. Montréal: McGill-Queen’s University Press.
Harring Sydney L. 1998. White Man’s Law: Native People in Nineteenth-Century Canadian Jurisprudence, coll. Osgoode Society for Canadian Legal History. Toronto: University of Toronto.
Teillet Jean. 2005. The Role of Natural Resources Regulatory Regime in Aboriginal Rights Dispute in Ontario. On-line. http://www.attorneygeneral.jus.gov.on.ca/inquiries/ipperwash/ policy_part/research/pdf/Teillet.pdf. Consulted June 22, 2009.