⚖️ Perpetual annuity

To: Hearsay Readers


  • Treaty rights and tax at the SCC this week

  • Employee loses EI after non-compliance with vaccine policy

  • Newfoundland starts disclosing intimate partner violence history

  • Trump hits the witness box


The Supreme Court is back for its November hearings. The two big hearings this week deal with treaty rights (November 7–8) and the Tax Court’s jurisdiction (November 9).

The Court might sit with a full complement for this week’s hearings, but it might not. Just this morning, Prime Minister Trudeau made it official — Justice Mary Moreau is no longer a nominee and has officially been appointed to the Supreme Court. The only thing still standing in her way now is a short swearing-in ceremony. If that takes place this afternoon, Justice Moreau can sit for tomorrow’s appeal.

But that doesn’t necessarily mean she will. None of the most recent appointees sat for an appeal so soon after their appointment was confirmed. And it would be tough to blame Justice Moreau if she takes a day or two to settle into her new office before getting down to business in the courtroom.

Treaty interpretation — Restoule v. Canada

This two-day hearing is a big one for First Nations treaty rights. Ontario argues the Anishinaabe got ripped off when they gave up a large portion of northern Ontario and says there’s nothing they can do about it.

What happened? The Crown started giving out mining licenses in northern Ontario in 1845. The Anishinaabe of the upper Great Lakes wanted compensation. After some negotiation, the Anishinaabe agreed to give up their land in exchange for a perpetual annuity payment.

Here’s what the treaties say about the annuity:

  • The “Chiefs and their Tribes” are entitled to an annual payment

  • The payment will be increased if the ceded lands generate profit and the government can increase the payment without suffering loss

  • The “amount paid to each individual” will never exceed $4 per person “or such further sum as Her Majesty may be graciously pleased to order”

The government increased the annuity to $4 per person in 1875 but hasn’t budged since.

Lower courts: The trial judge, and the Ontario Court of Appeal, said the government agreed to share profits from the ceded lands. Even though there’s a $4 cap, that’s a cap on payments to individuals and doesn’t cap the total amount of the annuity payment. So, the government needs to raise the annuity payment whenever its finances permit an increase. Otherwise, the treaty beneficiaries can take the government to court.

Canada accepted the lower courts’ conclusions and didn’t appeal, but Ontario doesn’t feel the same way. Ontario says $4 per person is an absolute cap and there’s no obligation to increase the payment. If the government is feeling generous, maybe they’ll bump it up one day.

Big picture: The main issue for the Court is the interpretation of the annuity — what’s the meaning of the $4 cap? But the appeal also raises issues with a broader impact:

  • What’s the standard of review for treaty interpretation?

  • Given that the annuity hasn’t increased since 1875, is there a limitation period?

  • What’s the appropriate remedy for the treaty breach? Should the Court order the government to pay money, or is the Crown simply obligated to negotiate in good faith?

Tax Court jurisdiction — Iris Technologies and Dow Canada

Where should disgruntled taxpayers go to complain about the Minister of National Revenue? That’s the question these two appeals will answer.

What happened? Both Dow Canada and Iris Technologies had their taxes reassessed. They didn’t like that — they’d prefer to pay less tax.

For Iris, the Minister issued a reassessment without completing an audit. Iris says that was an abuse of process. Iris wants the Federal Court to declare that the Minister acted improperly.

The government says Iris needs to challenge the assessments in Tax Court and isn’t allowed to go to Federal Court to complain about the Minister’s choices. But Iris doesn’t want to just sort out the dollars and cents in Tax Court. Iris wants the world to know the Minister is a bully.

Dow’s case is a bit more technical, but it boils down to this: in a specific area of international tax, the Income Tax Act tells the Minister not to make adjustments that would help the taxpayer. The Minister should only make the helpful adjustments if the Minister’s “opinion” is that it would be appropriate. For Dow, the Minister’s opinion was that Dow should pay more tax. Dow wants the Tax Court to decide whether that was a proper opinion.

But the government is saying the opposite of what it said to Iris. For Dow, the government’s position is that Dow must go to Federal Court to complain about the Minister’s choices — the Tax Court doesn’t have the power to weigh in.

The Federal Court of Appeal sided with the government in both cases. So, you can’t go to Federal Court to complain about the Minister’s conduct, but you must go to Federal Court if you want to complain about the Minister’s opinion.

Hopefully the Supreme Court’s ruling gives taxpayers clear direction on which route to take. Filing taxes is hard enough, shouldn’t we at least make it easy to fight about them?

Tax The Rich Joe Biden GIF by GIPHY News




🔎 Newfoundland and Labrador joined the list of provinces where police can disclose information about intimate partner violence risk. Under the Interpersonal Violence Disclosure Protocol Act, applicants can request information about their current or former intimate partner to check whether that person has a history of violence. And police can disclose information on their own accord if they decide someone is at risk. Similar legislation already exists in Saskatchewan and Alberta.

🏫 Three more Canadian universities are facing class-action lawsuits that allege systemic antisemitism. York University was first sued last month. Plaintiffs have now brought similar lawsuits against The University of British Columbia, Queen’s University, and Toronto Metropolitan University.

💉 The Federal Court of Appeal confirmed employees who refuse to follow their employer’s vaccine policy may be prevented from claiming employment insurance. Employees who commit misconduct can’t claim EI. The Social Security Tribunal said an employee committed misconduct when they refused to follow their employer’s vaccine policy, even though they had asked for an exemption on religious grounds. The Court said the Tribunal’s misconduct decision was reasonable and confirmed the denial of EI benefits.

Beyond the border

👔 Donald Trump is taking the stand as a witness in his civil fraud trial today. He’ll be asked about inflating his net worth to secure favourable loans. Fortunately, he’s been itching for this day since 2011:

I look very much forward to showing my financials. Because they are huge. And I think that is a positive in terms of what I am doing. Far bigger than anyone knows. Far bigger than anyone would understand. And they are very impressive, very little debt, great amounts of cash, a great net worth. ... Let me put it this way, The numbers will be far greater than any numbers you have ever heard about me.