Federal Court of Appeal upholds compensation awarded in
Southwind v. Canada, 2019 FCA 171
In 2017 the Federal Court awarded the Lac Seul First Nation roughly $30 million as equitable compensation for breaches of the Crown’s fiduciary duties in connection with the construction of a dam that flooded one-fifth of their reserve. The dam was constructed in 1929 as part of a hydroelectric project designed to generate power for the City of Winnipeg.
In a decision rendered on June 10, 2019, in Southwind v. Canada, the Federal Court of Appeal upheld that earlier decision and confirmed the award of equitable compensation to the Lac Seul First Nation.
This recent decision is important because the Court upheld Justice Zinn’s approach to the assessment of equitable compensation for historic breaches of the Crown’s fiduciary duties involving First Nations’ lands. Under the approach adopted by Justice Zinn, calculable losses assessed at less than $50,000 in 1929 were brought forward to the present by compounding interest annually at the Indian Trust Account rate. As a result, the calculable losses became an award of close to $15 million in 2017. Justice Zinn also awarded the Lac Seul First Nation $16.1 million in equitable compensation for their ‘non-calculable’ losses.
Significance of this Decision
The Federal Court of Appeal’s decision is important because it confirms the court below and Justice Zinn’s approach in assessing historic losses. This approach is a prospective one, which uses the concept of economic rents to bring those losses (except for lost opportunities to consume) forward by applying compound interest annually. It also includes an award for non-calculable losses to compensate First Nations for those losses that are harder to quantify. Canada did not challenge Justice Zinn’s approach to awarding equitable compensation and bringing historical losses forward.
Westaway Law Group has considerate experience and expertise in negotiating and settling historic claims, including the proper approach to calculating equitable compensation. Please contact us for more information.