On May 4, 2015, Nunavut Tunngavik Incorporated (NTI), the organization that represents Inuit under the Nunavut Land Claim Agreement, and the federal government reached a settlement in NTI’s $1billion lawsuit. This blog post summarizes the key elements of the settlement, which is likely to have significant implications for Nunavut and beyond.
The Nunavut Land Claim Agreement or NLCA, signed in 1993, is the largest land claim settlement in Canadian history and paved the way for the creation of the territory and Government of Nunavut. The 42 articles of the NLCA address a wide range of subject matters, from ownership of land and resources to economic development, employment, environmental protection, wildlife management, social and cultural affairs as well as political development. Of particular relevance to the recent settlement, Articles 23 and 24 of the NLCA pertain to levels of Inuit participation in government and government contracting.
In December, 2006, after negotiations over implementation reached an impasse, NTI commenced legal action against Canada for failing to live up to certain obligations to implement the NLCA. Before NTI filed its lawsuit seeking $1billion in damages, Canada had vetoed 17 attempts by NTI to resolve the impasse through arbitration (in addition to declining other non-litigation resolution options proposed by NTI).
The procedural history of the litigation was complex. Most notably, the part of the claim pertaining to Canada’s failure to set up a general monitoring plan under the NLCA was separated to proceed by way of summary judgment. In 2013, NTI was successful on summary judgment and was awarded $17million in damages.[i] On appeal, the Nunavut Court of Appeal determined that Canada breached Article 12 of the NLCA but ruled that the amount of the damages should be determined after the trial of the main action.[ii] For those interested in the treatment of claims of cabinet privilege, the Nunavut Court of Justice considered a procedural motion pertaining to this issue on the eve of trial.[iii]
The trial for the lawsuit was scheduled to commence in March, 2015. The trail was adjourned after negotiators from NTI, the Government of Nunavut and the Government of Canada were able to reach an out-of-court settlement agreement (the “Settlement Agreement”). The Settlement Agreement was signed on May 4, 2015.
Summary of the Settlement
- Broadly speaking, the Settlement Agreement covers three areas: financial matters and the dismissal of the litigation; matters pertaining to the implementation of the NLCA; and an amendment to the NLCA. Some of the highlights include: The Government of Canada will pay NTI $255.5 million to settle the claims for damages and costs. Of this amount
- NTI will create a Nunavut Inuit Training Corporation to hold and manage $175 million in a training fund to provide funding and other support for Inuit training and skills development; and
- The NTI Board of Directors will decide where to invest the remaining $80.5 million;
- The Government of Canada commits an additional $50 million over the next eight years to fund training initiatives and programs to enhance Inuit government employment and advancement under NLCA Article 23.
- The Government of Canada will complete a new Nunavut Inuit Labour Force Analysis in close consultation with NTI and the Government of Nunavut to assist in the development of effective Inuit employment and pre-employment training plans.
- The Government of Canada will develop a mandatory, Nunavut-specific federal contracting policy in close consultation with NTI.
- The Government of Canada also commits to new funding levels for Institutions of Public Government, Hunters and Trappers Organizations and Regional Wildlife Organizations. The new funding levels are retroactive to 2013.
- A new dispute resolution process will replace NLCA Article 38.
Implications of the Settlement Agreement in Nunavut and Beyond
While Canada did not admit liability in relation to the court proceeding, from a practical perspective the Settlement Agreement represents an acknowledgement that federal implementation efforts had fallen short of what was needed to uphold the intent of the NLCA. But the Settlement Agreement is much more than a “pay and walk away” agreement. The Settlement Agreement charts a joint path for properly implementing Articles 23 and 24 and, as such, provides an opportunity for Canada to embark on a major rededication to the NLCA and the territory of Nunavut.
In setting out a forward looking agreement, the parties have wisely set out a more detailed blue-print for implementing Articles 23 and 24. This comes in the form of clear steps that must be taken within prescribed timelines, as well as guiding principles and frameworks in the settlement documents to guide those steps. The parties have also anticipated that disputes may arise as they work to implement the NLCA and have established a number of new mechanisms to prevent and address these disputes, such as “check-in” points, criteria for assessing success, periodic external reviews and off-ramps for the resolution of disagreements through arbitration. The amendment to Article 38 of the NLCA to allow either party to refer disputes to the Nunavut Arbitration Board, even where the other party did not consent to arbitration, will have long-term ramifications for the resolution of implementation-related disputes.
While the effects of the settlement will be felt most directly in Nunavut, the settlement provides important lessons for others with land claim agreements and, more broadly, those with impact benefit agreements. We highlight three of those lessons here.
First, the settlement highlights that implementation of land claim agreements requires sufficient financial resources to be dedicated to implementation – something that is equally true of most, if not all, IBAs. Failing to make adequate provision for the financial costs of implementing agreements can result in protracted disagreements.
Second, underlying this settlement is a simple reality that applies to all long term agreements, whether land claim agreements or IBAs – no matter how clear an agreement may seem when it is being negotiated, implementation of long-term agreements will inevitably encounter disagreements. Here, NTI’s lawsuit prompted the parties to the NLCA to revisit the dispute resolution process in the NLCA and establish new mechanisms to resolve disputes. Others with IBAs and land claim agreements may wish to review the dispute resolution processes in their agreements to determine if those processes need to be made more effective and timely. For those currently negotiating land claim agreements and IBAs, the Settlement Agreement may provide concrete examples of dispute resolution (and dispute prevention) processes that can be built into those agreements.
Third, although in many ways related to the second point, the Settlement Agreement provides examples of some of the critical steps, guideposts and measures that parties may want to consider including in land claim agreements or IBAs that have articles relating to employment, training and contracting.
- For a summary of major steps in the litigation and links to court decisions: click here.
- For a history of implementation issues relating to the NLCA: Alistair Campbell, Terry Fenge and Udloriak Hanson, Implementing the 1993 Nunavut Land Claims Agreement, Arctic Review on Law and Politics, 2011: available here.
- For an analysis of the costs of not implementing Article 23 of the NLCA: The Cost of Not Successfully Implementing Article 23: Representative Employment for Inuit within the Government, PricewaterhouseCoopers, February 17, 2003: available here.
- For a discussion of how the teaching of Inuktitut in public education is critical to implementation of the NLCA: Thomas Berger, Conciliator’s Final Report: The Nunavut Project, March 1, 2006: available here.
**Author’s Note: Mark Gustafson assisted NTI with parts of the litigation process from 2008-2010.
[i] NTI v. Canada (A.G.), 2012 NUCJ 11
[ii] NTI v. Canada (A.G.), 2014 NUCA 02
[iii] NTI v. Canada (A.G.), 2014 NUCJ 31