David Electrical Contractor v. Garden River First Nation
[Indexed as: David Electrical Contractor v. Garden River First Nation]
73 O.R. (3d) 28
[2004] O.J. No. 4943
Sault Ste. Marie Court File No. 605/02
Ontario Superior Court of Justice,
Whalen J.
October 19, 2004
Aboriginal peoples — Property — Attachment — Moneys held
in First Nation’s off-reserve bank account which were generated at Casino Rama and distributed to First Nation under agreement with Ontario Lottery [page29] and Gaming Corporation not coming within deeming provisions of s. 90(1) of Indian Act — Moneys not exempt from garnishment — Indian Act, R.S.C. 1985, c. I-5.
The plaintiff sued the defendant First Nation (“GRFN”) for money owing to it for electrical work performed on housing units on the Reserve and obtained default judgment. GRFN moved to stay the enforcement of the judgment, arguing that it was exempt from attachment by garnishee or similar enforcement because of the Indian Act. GRFN’s funds were held in off- reserve bank accounts and came from a number of sources, including the following: gravel sales and royalties from Reserve lands; fundraising efforts of the Reserve fire department; revenues from a park located on the Reserve; rentals and spiritual lodges at the Reserve community hall; provincial funding in relation to a highway being built over the Reserve; rental of Reserve heavy equipment; timber sales from the Reserve; and funds generated at Casino Rama and distributed to GRFN, along with 132 other First Nations in
Ontario, under agreement with the Ontario Lottery and Gaming Corporation.
Held, the motion should be dismissed.
Under s. 89(1) of the Indian Act, personal property (which includes intangible property such as the right to payment of money) of an Indian or a band situated on a reserve is not subject to execution. Under s. 90(1)(b) of the Act, personal property that was “given to Indians or to a band under a treaty or agreement between a band and Her Majesty” is deemed to be situated on a reserve for the purposes of s. 89. If there was a sufficient nexus between the source of the moneys in the bank accounts as derived from or related to agreements in satisfaction of GRFN’s treaty rights, GRFN’s enjoyment or use of its reserve lands, or the Government of Canada’s obligation to GRFN qua natives or a First nation band, the funds would be characterized as being situated on the Reserve and therefore exempt from attachment. It was conceded for the purpose of this motion that moneys received from the federal government (or its agencies) and deposited into GRFN’s general operating account were exempt from attachment pursuant to s. 90(1)(b) of the Act. Most of the other funds in GRFN’s accounts were also exempt because of connecting factors that easily characterized them as integral to or intimately connected with the life of the Reserve or the use of Reserve lands. This was not the case with the funds received from Casino Rama revenues. The term “Her Majesty” in s. 90(1)(b) of the Act means the Federal Crown. The Casino Rama moneys came from an agency of the provincial government, so they were not “given to Indians or to a band under a treaty or agreement between the band and Her Majesty”. While the funds were derived from a casino operation on First Nations lands, they were not GRFN’s lands, and they had nothing to do with GRFN’s treaty or treaties with the federal government. Indeed, they had nothing to do with constitutional obligations owed to First Nations. They were directed by the Province of Ontario to benefit an identifiable and specifically needy part of the larger provinc ial population. That was not done as part of the province’s constitutional obligation to First Nations, but rather as an exercise of the provincial social policy and spending policy.
The activity generating the funds was a commercial one not controlled or operated exclusively by members of First Nations. The generation of Casino Rama funds was not intimately connected to the reserve, and the funds were not an integral part of Reserve life. Their protection was not necessary to prevent erosion of the property held by natives qua natives pursuant to their rights under federal constitutional obligation or related treaty. That the Casino Rama-generated funds were mixed with those derived from other sources that might be exempt from attachment did not operate as a block to attachment. [page30]
Cases referred to
Adams v. Canada, [2000] C.T.C. 2182; Chippewas of Mnjikaning First Nation v. CHC Casinos Canada Ltd., [2004] O.J. No. 4707 (C.A.), affg [2004] O.J. No. 7, [2004] O.T.C. 2 ( S.C.J.);
Lovelace v. Ontario, [2000] 1 S.C.R. 950, [2000] S.C.J. No. 36,
2000 SCC 37, 188 D.L.R. (4th) 193, 255 N.R. 1, 75 C.R.R. (2d)
189, 134 O.A.C. 201, affg (1997), 33 O.R. (3d) 735, [1997] O.J.
No. 2313 (C.A.); McDiarmid Lumber Ltd. v. God’s Lake First Nation, [2004] M.J. No. 281, 3 C.N.L.R. 192 (Q.B.); Mitchell v.
Peguis Indian Band, [1990] 2 S.C.R. 85, 67 Man. R. (2d) 81, 71
D.L.R. (4th) 193, 110 N.R. 241, [1990] 5 W.W.R. 97; Reclama v.
Canada, [1998] 2 C.T.C. 403, [1998] F.C.J. No. 433 (C.A.);
Williams v. Canada, [1992] 1 S.C.R. 877, 90 D.L.R. (4th) 129,
136 N.R. 161, 41 C.C.E.L. 1, 92 D.T.C. 6321 (sub nom. Williams
v. M.N.R., Williams v. R., R. v. Williams Statutes referred to
Indian Act, R.S.C. 1985, c. I-5, ss. 89, 90
Rules and regulations referred to
Rules of the Small Claims Court, O. Reg. 258/98, rule 20.02(1) (a)
MOTION for a stay of enforcement of a judgment.
O. Rosa, for plaintiff.
J. Tremblay-Hall, for defendant.
WHALEN J.: —
A. Introduction
[1] The defendant, Garden River First Nation (hereafter “GRFN”), has moved to stay the enforcement of a judgment against it in favour of the plaintiff/judgment creditor, David Electrical Contractor (hereafter “David”). For the reasons that follow the motion is denied and the Royal Bank of Canada is directed to pay the amount of the judgment garnisheed.
B. Background Facts
[2] In February 2002, GRFN contracted with David to do electrical work on certain housing units on the Reserve. This was the second contract between the parties, and part of a larger housing project. GRFN became unhappy with David’s work and, in particular, the contractor’s alleged failure to address certain deficiencies. In the result, GRFN held back payment of $7,200. David sued in the Small Claims Court and obtained default judgment on February 3, 2003.
[3] On February 19, 2003, David garnisheed GRFN’s bank accounts at a branch of the Royal Bank of Canada in Sault Ste. Marie. The garnishee was for $7,578.39, including costs and post-judgment interest. [page31]
[4] On February 21, 2003, GRFN moved to set aside the default judgment, and alternatively to stay its enforcement, pursuant to the Rules of the Small Claims Court, O. Reg. 258/98, rule 20.02(1)(a). On August 28, 2003, the issue of the default judgment was argued and the motion denied. Since then, the stay of enforcement has been argued, with submissions being received on several more occasions to permit the receipt of viva voce evidence and further research by counsel as the complexity of the issue unfolded.
[5] GRFN argues it is exempt from attachment by garnishee, or similar enforcement because of the Indian Act, R.S.C. 1985, c. I-5 and case law that has developed under it.
[6] Because GRFN took the position it was exempt from attachment, it would not release information about the nature and source of the targeted bank accounts. David therefore subpoenaed a representative of GRFN’s accounting firm to testify.
[7] Mr. John Missere is a Certified General Accountant of 30 years experience. He is employed by BDO Dunwoody Chartered Accountants, and has been responsible for conducting audits of GRFN’s financial affairs for about ten years. He was intimately aware of GRFN’s financial operations.
[8] Mr. Missere explained that GRFN had eight accounts at the particular Royal Bank branch, including: general operating account; welfare account; two bingo accounts; two investment accounts; daycare account; and CMHC account. GRFN generated revenues from a number of sources other than the federal government and its agencies, and those funds found their way into the bank accounts. These revenues came from a number of sources, including: gravel sales and royalties from reserve lands (related largely to a highway contract over the Reserve); fundraising efforts of the reserve fire department; revenues from a park located on the reserve (Ojibway Park); rentals and spiritual lodges at the reserve community hall; provincial funding in relation to the highway being built over the reserve; rental of reserve heavy equipment; timber sales from the reserve; and funds generated at Casino Rama and distributed under agreement with the Ontario Lottery and Gaming Corporation.
[9] The amounts in the accounts from each of these sources were well above the amount of the garnishee. In the case of the Casino Rama revenues generated during the relevant period, GRFN had received $287,245 “regular contributions” and $950,324 for “future generations”. Mr. Missere thought the Casino Rama revenues likely went into the bank’s general operating account at the Royal Bank. GRFN was not forthcoming with that information. [page32] C. Legal Analysis
[10] The Indian Act, R.S.C., 1985, c. I-5 (as amended) provides:
89(1) Subject to this Act, the real and personal property of an Indian or a band situated on a reserve is not subject to charge, pledge, mortgage, attachment, levy, seizure, distress or execution in favour or at the instance of any person other than an Indian or band.
. . . . .
90(1) For the purposes of sections 87 and 89, personal property that was
(a) purchased by Her Majesty with Indian moneys or moneys appropriated by Parliament for the use and benefit of Indians or bands, or
(b) given to Indians or to a band under a treaty or agreement between a band and Her Majesty shall be deemed always to be situated on a reserve.
[11] “Personal property” in s. 89(1) (just quoted) has been held to include intangible property, such as the right to payment of money: Mitchell v. Peguis Indian Band, [1990] 2 S.C.R. 85, 71 D.L.R. (4th) 193, at para. 40. The funds on deposit to the credit of GRFN are therefore “personal property”. However, because the branch of the bank is in the city of Sault Ste. Marie, it is not physically situated on a reserve, and neither then are the funds in the account.
[12] In spite of the actual physical location of the targeted accounts off the Reserve, they may still be situated on the Reserve for legal purposes if they come within the deeming provisions of s. 90(1). Through judicial interpretation, the reach of the section has also been extended to property identified through “connecting factors”.
[13] The connecting factors test was first articulated by Gonthier J. in Williams v. Canada, [1992] 1 S.C.R. 877, 90 D.L.R. (4th) 129, at para. 37:
The first step is to identify the various connecting factors which are potentially relevant. These factors should then be analyzed to determine what weight they should be given in identifying the location of the property, in light of three considerations: (1) the purpose of the exemption under the Indian Act; (2) the type of property in question; and (3) the nature of the taxation of that property. The question with regard to each connecting factor is therefore what weight should be given that factor in answering the question whether to tax that form of property in that manner would amount to the erosion of the entitlement of the Indian qua Indian on a reserve.
[14] Justice Gonthier discussed the purpose of the test at paras. 15 to 19 of his reasons: [page33]. The question of the purpose of ss. 87, 89 and 90 has been thoroughly addressed by La Forest J. in the case of Mitchell v. Peguis Indian Band, [1990] 2 S.C.R. 85. La Forest J. expressed the view that the purpose of these sections was to preserve the entitlements of Indians to their reserve lands and to ensure that the use of their property on their reserve lands was not eroded by the ability of governments to tax, or creditors to seize. The corollary of this conclusion was that the purpose of the sections was not to confer a general economic benefit upon the Indians (at pp. 130-31):
The exemptions from taxation and distraint have historically protected the ability of Indians to benefit from this property in two ways. First, they guard against the possibility that one branch of government, through the imposition of taxes, could erode the full measure of the benefits given by that branch of government entrusted with the supervision of Indian affairs. Secondly, the protection against attachment ensures that the enforcement of civil judgments by non-natives will not be allowed to hinder Indians in the untrammelled enjoyment of such advantages as they had retained or might acquire pursuant to the fulfillment by the Crown of its treaty obligations. In effect, these sections shield Indians from the imposition of the civil liabilities that could lead, albeit through an indirect route, to the alienation of the Indian land base through the medium of foreclosure sales and the like; see Brennan J.’s discussion of the purpose served by Indian tax immunities in the American context in Bryan v. Itasca County, 426 U.S. 373 (1976), at p. 391.
In summary, the historical record makes it clear that ss.
87 and 89 of the Indian Act, the sections to which the deeming provision of s. 90 applies, constitute part of a legislative “package” which bears the impress of an obligation to native peoples which the Crown has recognized at least since the signing of the Royal Proclamation of 1763. From that time on, the Crown has always acknowledged that it is honour-bound to shield Indians from any efforts by non-natives to dispossess Indians of the property which they hold qua Indians, i.e., their land base and the chattels on that land base.
It is also important to underscore the corollary to the conclusion I have just drawn. The fact that the modern-day legislation, like its historical counterparts, is so careful to underline that exemptions from taxation and distraint apply only in respect of personal property situated on reserves demonstrates that the purpose of the legislation is not to remedy the economically disadvantaged position of Indians by ensuring that Indians may acquire, hold, and deal with property in the commercial mainstream on different terms than their fellow citizens. An examination of the decisions bearing on these sections confirms that Indians who acquire and deal in property outside lands reserved for their use, deal with it on the same basis as all other Canadians.
La Forest J. also noted that the protection from seizure is a mixed blessing, in that it removes the assets of an Indian on a reserve from the ordinary stream of commercial dealings (at pp. 146-47).
Therefore, under the Indian Act, an Indian has a choice with regard to his personal property. The Indian may situate this property on the reserve, in which case it is within the protected area and free from seizure and taxation, or the Indian may situate this property off the reserve, in which case it is outside the protected area, and more fully available for ordinary commercial [page34] purposes in society. Whether the Indian wishes to remain within the protected reserve system or integrate more fully into the larger commercial world is a choice left to the Indian.
The purpose of the situs test in s. 87 is to determine whether the Indian holds the property in question as part of the entitlement of an Indian qua Indian on the reserve. Where it is necessary to decide amongst various methods of fixing the location of the relevant property, such a method must be selected having regard to this purpose.
[15] The purpose and application of the connecting factors test were also described by Linden J. in Reclama v. Canada, [1998] 2 C.T.C. 403, [1998] F.C.J. No. 433 (C.A.) at para. 9:
In evaluating the various factors the Court must decide where it “makes the most sense” to locate the personal property in issue in order to avoid the “erosion of the property held by Indians qua Indians” so as to protect the traditional Native way of life. It is also important in assessing the different factors to consider whether the activity generating the income was “intimately connected to” the Reserve, that is, an “integral part” of Reserve life, or whether it was more appropriate to consider it a part of “commercial mainstream” activity. (See Folster v. The Queen (1997), 97 D.T.C. 5315 (F.C.A.)) We should indicate that the concept of “commercial mainstream” is not a test for determining whether property is situated on a reserve; it is merely an aid to be used in evaluating the various factors being considered. It is by no means determinative. The primary reasoning exercise is to decide, looking at all the connecting factors and keeping in mind the purpose of the section, where the property is situated, that is, whether the income earned was “integral to the life of the Reserve”, whether it was “intimately connected” to that life, and whether it should be protected to prevent the erosion of the property held by Natives qua Natives.”
[16] Archambault T.C.J. considered the Mitchell case, supra, at length in concluding that for an agreement to come within s. 90 it had to be one connected to a treaty obligation: Adams v. Canada, [2000] C.T.C. 2182, at paras. 27 to 39. In McDiarmid Lumber Ltd. v. God’s Lake First Nation, [2004] M.J. No. 281, [2004] 3 C.N.L.R. 192 (Q.B.), at paras. 85 to 87, Justice Sinclair broadened that view to include those agreements necessary for Canada to carry out its treaty obligations towards Indians and Indian lands.
[17] It would therefore seem that if there is a sufficient nexus between the source of the moneys in the bank accounts as derived from or related to agreements in satisfaction of GRFN’s treaty rights, GRFN’s enjoyment or use of its reserve lands, or the Government of Canada’s obligation to GRFN qua natives or a First Nation band, the funds will be characterized as being situated on the Reserve and therefore exempt from attachment. The purpose of such deeming is to avoid the erosion (direct or indirect) of obligations owing and rights flowing to First Nations bands and members by established treaties and federal constitutional obligation. [page35]
[18] For purposes of this motion, it was conceded that moneys received from the federal government (or its agencies) and deposited into the general operating account in question were exempt from attachment pursuant to s. 90(1)(b) of the Indian Act.
[19] I have little difficulty concluding that most of the other funds in the accounts as described by Mr. Missere are also exempt because of connecting factors that easily characterize them as integral to or intimately connected with the life of the Reserve or the use of Reserve lands. The bingo and spiritual lodge funds raised at the community hall were all generated on the Reserve. They are part of the recreational and spiritual fabric of the community, and were raised through the efforts of members of the band from other members. The same can be said of the fire department’s fundraising revenues. The gravel and timber revenues come from resources located directly on the Reserve. They are part of GRFN’s use of lands dedicated to it by treaty. The park revenues also come directly from the use of Reserve land. The Ontario Ministry of Transportation’s payments are in relation to the development of the Trans-Canada Highway or community roads on the Reserve — i.e., compensation for displacement f rom, use of or work on treaty lands. I conclude that the rental of heavy equipment is also related to on-reserve road or highway projects and involves the Reserve’s own equipment. The nexus between these revenues and the use or enjoyment of reserve lands and treaty rights seems obvious.
[20] The difficult question is with respect to the funds received from Casino Rama revenues and deposited into the account — over $1,237,000 during the period in question. GRFN bears the onus of satisfying the court that the exemption from attachment applies. No evidence was led explaining or documenting the arrangement. As part of her written submissions, GRFN’s counsel submitted copies of several documents purporting to be agreements in connection with Casino Rama generated revenue. They were not proven and cannot be accepted as evidence.
[21] However, Casino Rama has been the subject of judicial consideration that I am comfortable considering, especially in the summary spirit of Small Claims Court litigation. General background was discussed in the Ontario Court of Appeal’s decision in Lovelace v. Ontario (1997), 33 O.R. (3d) 735, [1997] O.J. No. 2313 (C.A.), at pp. 742-45 O.R.:
The Criminal Code, R.S.C. 1985, c. C-46, s. 207, prohibits the operation of a permanent, full-time commercial casino unless it is regulated and managed by a province, in accord with provincial legislation. Prior to 1992, commercial casinos had never operated in the province of Ontario. [page36]
Throughout the 1980s, various bands began operating illegal high-stakes bingo and other games of chance on their reserves. Interest in expanded gaming activity grew among bands, along with their economic development and self- government aspirations. Some bands claimed the right to control gambling on their reserves as part of their inherent right of self-government. By 1991, various bands had approached Ontario to discuss the expansion of on-reserve gaming as a means of economic growth.
In 1992, Ontario decided to authorize casino gambling in the province, using pilot projects. The city of Windsor was chosen as the site of the first commercial casino. Ontario enacted the Ontario Casino Corporation Act, 1993, S.O. 1993, c. 25 to regulate commercial casino operations. This Act created the Ontario Casino Corporation (“OCC”) to manage casino gaming in Ontario. The OCC receives all revenues from the casino, and makes payments from the revenues in accord with the following priorities: (i) payment of winnings to the players, (ii) payment as required to the Ontario Consolidated Revenue Fund (known as the “win-tax”), (iii) payment of the operating expenses of the OCC, and (iv) payment as required to the Gaming Control Commission. Any surplus revenue goes into Ontario’s Consolidated Revenue Fund. The city of Windsor does not receive any profits from the casino itself, but hopes to benefit from increased tourism and commercial activity in the area.
As the Windsor pilot project developed, bands continued to voice their desire for legalized commercial gaming on reserves to generate funds for economic development. By 1993, Ontario had received 29 requests from bands for casinos, including one application from the Union of Ontario Indians, which represented 44 bands. Ontario decided to develop a pilot project to promote the economic development of all the bands in the province. John Rabeau, the former Director of the Aboriginal Gaming Section of the Ministry of Consumer and Corporate Relations, gave evidence “that the intention from the onset was to develop a single pilot project to assist First Nations under the Indian Act” and that other aboriginal groups were to be excluded.
In early 1993, Ontario began negotiations with the bands on a commercial casino that would have a reserve instead of a municipal base. The project would differ from the Windsor casino in that the casino’s net revenue would not go into the consolidated revenue fund but would instead be distributed to bands. In making the decision to distribute the casino revenue among bands, Ontario relied on the rigid reporting and accountability standards that apply to bands registered under the Indian Act. Strict reporting and accountability was needed because of the large sums of money expected from the casino. Profits are estimated at $100 million per year over the next ten years.
At a meeting in April 1994, between Ontario and the Chiefs of Ontario, Ontario agreed to recognize a First Nations Fund to receive and administer the revenue on behalf of the bands. Ontario also agreed that band representatives would participate in negotiating the method for distributing the revenue in the Fund among the bands. Later that year, Ontario and the Chiefs of Ontario began negotiations to select a site. They issued a request for proposals, which explicitly stated that the Casino Rama project was intended to give effect to the statement of political relationship signed in 1991 by Ontario and band representatives. Fourteen proposals were received. In December 1994, the site selection panel announced that the Rama First Nation Reserve had been chosen as the site of the casino. This site consists of 40 acres of land near Orillia, fronting on Lake Couchiching . . . [page37] . . . On May 2, Ontario advised . . . that it considers the term “First Nation” to be synonymous with “band”. Accordingly, the First Nations Fund is to be distributed among bands only. The Lovelace applicants then commenced these proceedings.
[22] In Chippewas of Mnjikaning First Nation v. CHC Casinos Canada Ltd., [2004] O.J. No. 7, [2004] O.T.C. 2 (S.C.J.), Swinton J. generally described the contractual structure of the Casino Rama arrangement at paras. 4-6:
The OLGC [Ontario Lottery and Gaming Corporation], formerly the Ontario Casino Corporation or “OCC”, is a Crown agency of the Ontario government. Pursuant to the Ontario Lottery and Gaming Corporation Act, 1999, S.O. 1999, c. 12, OLGC is responsible for the conduct and management of lottery games, commercial and charity casinos and racetrack slot operations in the Province of Ontario. Gaming is regulated in Canada by the Criminal Code, which generally prohibits gaming, but provides in s. 207(1)(a) that it is lawful for a province to conduct and manage certain gaming activities in accordance with any law enacted by the provincial legislature. Ontario “conducts and manages” gaming activities in the province through the OLGC.
OLGC has retained and appointed CHC Casinos Canada Ltd., the Operator, as its sole and exclusive agent to operate on behalf of and for the account of OLGC the gaming activities and activities related thereto at the Casino Rama complex
. . .
The DOA [the Developing and Operating Agreement, which generally governed development and operations of the project] was originally signed on March 18, 1996 and was amended on April 15, 1996 and June 12, 2000. The parties are OLGC (formerly the Ontario Casino Corporation), MFN [Mnjikaning First Nation] and a number of corporations owned by MFN that hold interests in Casino Rama on its behalf, and CHC Casinos Canada Ltd. OFNLP [The Ontario First Nations Limited Partnership] is not a party to the DOA. However, the recitals of the DOA include the following:
AND WHEREAS Her Majesty the Queen in Right of Ontario and the First Nations of Ontario agreed to the establishment of a First Nations casino in the Province of Ontario as a vehicle to enhance the growth and capacity of First Nations in the areas of economic development, education and training and management;
AND WHEREAS on December 5, 1994, Rama was selected by an independent Site Selection Panel to be the host for a casino complex to be developed and operated on the Reserve
. . .
[23] The Developing and Operating Agreement required the Operator to disburse funds according to a complex funding process known as the “priorities waterfall”, which was also discussed [at paras. 11 and 12]:
Thus, revenues generated by the casino are paid out in accordance with the funding or priorities waterfall. For example, revenues from the casino are to be used to pay the following in order of priority: winnings, Wintax to the Ontario government, ground rent, and salaries of the Operator’s employees. After those items, the interest on the bank loan and payments of the [page38] principal of the loan are the next priorities in the distribution of casino revenues. After payments in order of the first sixteen items, the amount set out in clause (xvi) is then deposited in an account designated by OLGC.
The funds are distributed monthly by OLGC pursuant to the provisions of the Revenue Agreement, dated June 9, 2000, in accordance with the OLGC Act. The parties to the Revenue Agreement are the Crown in Right of Ontario, OLGC, OFNLP and MFN through a limited partnership. In general terms, these funds are to be distributed among the 133 First Nations of Ontario by OFNLP and to MFN in accordance with the Revenue Agreement.
[24] GRFN is a “band” within the meaning of the Indian Act and, as such, is one of the 133 First Nations partnering under the Ontario First Nations Limited Partnership and benefiting from the proceeds flowing through to those first nations from Casino Rama.
[25] In considering the circumstances in our own case, it significant to note that the term “Her Majesty” in s. 90(1)(b) of the Indian Act has been held to mean the Federal Crown. In Mitchell v. Peguis Indian Band, supra, at para. 116, Gonthier
J. concluded:
I conclude that the statutory notional situs of s. 90(1)(b) is meant to extend solely to personal property which enures to Indians through the discharge by “Her Majesty” of her treaty or ancillary obligations. Pursuant to s. 91(24) of the Constitution Act, 1867, it is of course “Her Majesty” in right of Canada who bears the sole responsibility for conferring any such property on Indians, and I would, therefore, limit application of the term “Her Majesty” as used in s. 90(1)(b) to the federal Crown. [Mitchell v. Peguis Indian Band, [1990] 2 S.C.R. 85, at para. 116.]
[26] Justice Gonthier held further at para. 121:
The provincial Crowns bear no responsibility to provide for the welfare and protection of native peoples, and I am not prepared to accept that Parliament, in enacting s. 90(1)(b), intended that the privileges of ss. 87 and 89 exempt Indian bands from taxation and civil process in respect of all personal property that they may acquire pursuant to all agreements with that level of government, regardless of where that property is located. This interpretation is simply too broad. . . .
[27] Applying ss. 89 and 90 of the Indian Act and the connecting factors test, I conclude that there is insufficient nexus between the proceeds derived from Casino Rama and GRFN to warrant its protection and exemption from attachment.
[28] The moneys come from an agency of the provincial government, so they are not “given to Indians or to a band under a treaty or agreement between the band and Her Majesty”. The source is the Crown in right of the province, not the federal crown.
[29] While the funds are derived from a casino operation on First Nation lands, they are not GRFN’s lands, and they have [page39] nothing to do with GRFN’s treaty or treaties with the federal government. Indeed, I conclude that they have nothing to do with constitutional obligations owed to First Nations. They were directed by the Province of Ontario to benefit an identifiable and specifically needy part of the larger provincial population, and in order to encourage the objectives of that community, which the province has recognized as worthy of financial support. It was not done as part of the province’s constitutional obligation to First Nations, but rather as an exercise of the provincial social policy and spending policy.
In my opinion there is nothing in the casino program affecting the core of the s. 91(24) federal jurisdiction. The Ontario government is simply using the definition of band found in the federal Indian Act. The province has done nothing to impair the status or capacity of the appellants as aboriginal peoples. Furthermore, in Pamajewon, supra, this court found that gambling, or the regulation of gambling activities, is not an aboriginal right. Consequently, this casino program cannot have the effect of violating the rights affirmed by s. 35(1) of the Constitution Act, 1982, and does not approach the core of aboriginality. I agree with the Ontario Court of Appeal, therefore, that the casino program falls within the provincial spending power, and the province did not act in any way to encroach upon federal jurisdiction. (Lovelace v. Ontario, [2000] 1 S.C.R. 950, [2000] S.C.J. No. 36, at para. 111.)
[30] In other words, the benefit of the Casino Rama funds is to address economic disadvantage, a corollary purpose to the constitutionally and treaty protected rights that afford protection from attachment as mentioned in the passage quoted from La Forest J., supra, in para. 14.
[31] Also, the activity generating the funds is a commercial one not controlled or operated exclusively by members of First Nations, although First Nations members undoubtedly participate in its operation through employment and supply. The patrons of the Casino are also the broader public. First Nations members surely patronize Casino Rama, but within the broader public context.
[32] That the funds are distributed to the contracting First Nations for specified purposes is not determinative. It is no different than the earmarking of Ontario Lottery funds for health or cultural purposes among the broader population. The Province of Ontario may choose to share the proceeds of its licensed gambling operations with any portion of Ontario’s society and according to defined guidelines and for defined purposes. That is a matter of provincial social and spending policy. The province bears no direct treaty obligation to GRFN, or at least none was identified in the course of this hearing.
[33] It is difficult to see how the generation of the Casino Rama funds is intimately connected to the reserve or that they [page40] are an integral part of Reserve life. Their protection is not necessary to prevent erosion of the property held by natives qua natives pursuant to their rights under federal constitutional obligation or related treaty. The funds are generated in the commercial mainstream.
[34] That the Casino Rama generated funds are mixed with those derived from other sources that may be exempt from attachment should not operate as a block to attachment. The protected funds are in no way diminished or threatened because the amount in question is such a small part of the Casino Rama funds received by GRFN, and the Casino Rama funds in turn are but a small portion of the rest of the funds in the account. It would be artificial and unjust to take such an approach in these circumstances. Because of the way modern banking is done by electronic crediting/debiting systems internal to banking operations, it would never be possible to identify actual “Casino Rama dollars”.
[35] For these reasons, the motion to stay the garnishee is denied, and it is ordered that the Royal Bank of Canada pay the amount of the garnisheed judgment. If they cannot agree, the parties may arrange to make submissions on costs through the trial co-ordinator.
2004 CanLII 44988 (ON SC)