Study on Motion to Resolve that an Amendment to the Constitution (Saskatchewan Act) be Authorized to be Made by Proclamation Issued by the Governor General
Fourth Report of Legal and Constitutional Affairs Committee--Debate Adjourned
April 5, 2022
Honourable senators, I want to start today with some history. In 1880, the Government of Canada signed a contract with the Canadian Pacific Railway, or CPR, granting to the railway the right, in perpetuity, to be exempt from paying taxes along its proposed route through the Canadian Prairies.
In 1880, let’s remember, the provinces of Saskatchewan and Alberta did not exist. It had only been in 1869, just 11 years before, that the Hudson’s Bay Company sold the territory it called Rupert’s Land to the government of the new nation of Canada for the fire sale price of £300,000 or $1.5 million — although you could argue that the Hudson’s Bay Company got a pretty good deal since the land in question didn’t actually belong to them. The land had never been conquered by the British Crown. It was Hudson’s Bay Company trading territory, but it had been, until that moment, the territory of the First Nations and the Métis Nation, who called it home.
Eventually there would be treaties that covered the land where the CPR would lay its rails, but those treaties weren’t signed until years after the land sale: Treaty 4 in 1874; Treaty 6 in 1876; and Treaty 7, not signed until 1877, just three years before the government signed its deal with the CPR.
It was an act of no small colonial hubris for the government of Sir John A. Macdonald to award Canadian Pacific Railway the eternal freedom from paying taxes on land it had been given by the Crown for its right-of-ways. Yes, that’s right — the CPR got the land for free and an everlasting tax holiday, too.
That same colonial spirit was strongly at play when Saskatchewan and Alberta finally entered Confederation in 1905, not as full-fledged provinces with the same rights as the others, but with slightly second-class status when it came to the governance of their own lands and natural resources. That same central Canadian colonial mindset helps to explain why the CPR tax exemption was written right into The Alberta Act and The Saskatchewan Act, and thus into the British North America Act itself.
I mean, it is absurd, when you think about it. We actually wrote a corporate subsidy — a perpetual tax holiday — for one private company right into our Constitution, our nation’s supreme piece of legislation. And we left it right there in 1982 when we repatriated our Constitution, making the taxpayers of Alberta, Saskatchewan and Manitoba, too, perpetual second-class citizens, perpetually on the hook, committed to subsidizing the cost of Sir John A. Macdonald’s crony capitalism forever and ever, amen.
Perhaps the reason this issue didn’t come up 40 years ago when we brought the Constitution home is because the CPR actually started paying its taxes on the Prairies voluntarily in 1966. Perhaps that’s why no one dealt with this oddball anachronism in 1982 when we opened up the Constitution for review and restructure.
Indeed, this whole matter might have been consigned to the history books if the CPR hadn’t sued the three Prairie provinces in 2008, demanding the return of the taxes they had already voluntarily paid, or, to be more precise, for six years of back taxes, the most they could claim under the statute of limitations.
Their logic was based on a 2007 Supreme Court of Canada decision called Kingstreet Investments Ltd. v. New Brunswick (Finance). In that case, the Supreme Court held that restitution should be generally available for the recovery of monies collected under legislation that is subsequently declared to be ultra vires because it would be fundamentally wrong for a government to retain taxes it collected under a regime that was beyond its legal powers. To use a non-Latin phrase, CPR’s interpretation of Kingstreet stirred up a hornet’s nest.
Today, we are specifically discussing a motion to end Canadian Pacific Railway’s tax-free status in Saskatchewan, but let’s note that the CPR sued Alberta, too, filing its statement of claim against my province on August 13, 2008. That was back when Ed Stelmach was Alberta’s premier.
Though the case has yet to go to trial, or even to proceed to examinations for discovery, that lawsuit has stayed active throughout the premierships of Ed Stelmach, Alison Redford, Jim Prentice, Dave Hancock, Rachel Notley and Jason Kenney. Indeed, the CPR filed an updated statement of claim against Alberta in December 2020, demanding that it be exempt from paying carbon and fuel taxes, too.
So I’m speaking today very much as an Alberta senator and an Alberta taxpayer with a keen interest in ensuring that other Alberta taxpayers are getting their own fair deal from Confederation.
With that framing in mind, let me make three points.
First, despite the wording of The Alberta Act and The Saskatchewan Act, and despite the incorporation of this never‑ending corporate subsidy into the Constitution, the deal is not written in stone, and legal authorities seem to agree that the Parliament of Canada has the right and power to amend it. Parliament, after all, is sovereign, and no parliament, one could argue, has the power to bind a future parliament in this perpetual way, because no one parliament — even one led by Sir John A. Macdonald — is superior to another.
This isn’t a fairy tale from The One Thousand and One Nights or the Brothers Grimm, where a kingdom is cursed because its king signed some kind of blood contract with a jinni or Rumpelstiltskin. We have the power to break this spell.
This was a business deal inked in 1880, in a completely different world — one where Saskatchewan and Alberta didn’t even exist and where no one imagined that CP would be changing its name to Canadian Pacific Kansas City Limited or be running trains all the way to Mexico. How logical is it for such an agreement to be binding 142 years later?
Second, there is, at the same time, a question of procedural fairness and what you might call natural justice. CP and the Government of Saskatchewan have been locked in an active legal dispute over this issue since 2008. For the Government of Saskatchewan and the Parliament of Canada to short-circuit that legal process by changing the rules so radically in the middle of the game isn’t exactly sporting. To use an 1880 colonial idiom, it is “hardly cricket.”
Now, maybe you don’t feel particularly badly for CP. After all, they opened this can of worms when they sued back in 2008. They might have anticipated that Saskatchewan, rather than pay back millions in taxes, might use this nuclear option. Also, given that CP reported $8 billion in revenues for 2021, maybe you’re not feeling deeply sympathetic.
But I feel uneasy at the thought of amending the Constitution retroactively, as this motion proposes, backdating this change to 1966. The Constitution is the moral code and the DNA for our country. It has to be treated with respect and with the understanding that our actions have long echoes. For a government to reverse a constitutional entitlement in this ex post facto way sets a problematic precedent. What other constitutional rights or entitlements might a future government attempt to antedate in this fashion?
In its 1988 ruling in Ford v. Quebec, the Supreme Court of Canada held that the Constitution’s “notwithstanding” clause could not be applied retroactively but only as an act of prospective derogation. I am no expert in constitutional law, although many here are, but from a common sense perspective, I can’t help but wonder if a parallel philosophical argument for prospective derogation might not apply here also. I am happy to argue that we should change this deal going forward for the benefit of Saskatchewan’s future. I am considerably less comfortable with a motion that seeks to time travel some 56 years into the past, not just to rewrite the Constitution but to rewrite history. It may be valid, but I’m not sure it’s good public policy.
Here is my third concern: This is a stand-alone deal for Saskatchewan, a constitutional carve-out for one province, but Saskatchewan is flanked by Alberta and Manitoba, two provinces that share the same CP conundrum. Does it make sense to amend the Constitution for the benefit of only one province when two other provinces are in the same boat — or a rail car? There’s an old expression, “That’s no way to run a railroad.” I can’t help but feel that adage applies here.
Amending the Constitution in this patchwork, piecemeal way leaves us with an uneven and uneasy Confederation. As an Albertan, I’m upset that my own province has been left at the station, as it were, shunted to the side. This is not fair to Albertans, and it’s an imbalance that cannot be allowed to stand.
I have attempted to reach out to the Alberta government to discuss this, and I’d be very willing to work with the province to see what can be done to address this imbalance. That might well include volunteering to move a motion in the Senate to ensure that Albertans get their just deserts.
In the meantime, I’m concerned that by doing these amendments bit by bit, we’re missing a chance for a more coherent examination of these constitutional irregularities. I fear, too, that we’re forfeiting the chance to address the role and the rights of Indigenous peoples through whose traditional lands in Alberta the CP main line runs, including the five nations of Treaty 7: the Siksika, the Kainai, the Piikani, the Stoney-Nakoda and the Tsust’ina.
Thank you for giving me, as an Alberta senator, this opportunity to speak up for the rights of all my fellow Albertans. It is long past time to correct a legal anachronism that denies the three Prairie provinces their constitutional right to levy and collect taxes on their own territories. We can’t be a modern Confederation while Alberta, Saskatchewan and Manitoba are still treated like second-class colonies. I just wish we were tackling this problem in a somewhat different way.
Thank you, hiy hiy.
Honourable senators, I thank my colleagues for their speeches on this matter.
I speak today to urge that we work together to uphold one of our most important duties as senators. As we well know, we share a responsibility to ensure that all perspectives are heard. Far too often, the perspectives of those most marginalized seem to be intentionally ignored. Today, we have an opportunity to ensure they are not.
Here are some important facts.
The 1881 agreement between the Government of Canada and CP Railway provided CP Railway access to traditional territories of First Nations peoples, both unceded lands and treaty lands. Clause 12 of the contract between CP Railway and the Government of Canada states:
The Government shall extinguish the Indian title affecting the lands herein appropriated, and to be hereafter granted in aid of the railway.
This blatant disregard for the rights of Indigenous peoples underpins and forms crucial context for Motion No. 14.
The lands transferred between CP Railway and the Government of Saskatchewan are governed by three treaties — 4, 6 and 10 — signed with the Cree, Saulteaux, Chipewyan, Ojibwe and Assiniboine. These were agreements negotiated in good faith between the Crown and Indigenous peoples but that have not been honoured by the Canadian government.
Tempting as it is to try to list the depth and breadth of all these broken promises, time today does not permit it so, for additional details, I will urge anyone interested to review the documents of the Royal Commission on Aboriginal Peoples, the Truth and Reconciliation Commission and the Final Report of the National Inquiry into Missing and Murdered Indigenous Women and Girls.
In order to provide you with just a taste of the sorts of issues involved, however, I feel it is important to give a few examples.
The first breach concerns the settlement on an area known as the “treaty ground,” a place that was agreed to be set aside to conduct treaty business. It was the site where Treaty 4 was signed and where Indigenous peoples received their annual treaty compensation.
In 1882, Treaty 4 peoples were told to receive their payments on their reserves instead of on the ground. Although this decision was met with resistance by the First Nation, Indian Affairs unilaterally transferred the treaty ground to the Department of the Interior in 1894. It took more than a century for Treaty 4 peoples to get this land back.
Treaty 6 was signed when the Cree were in constant threat of starvation, as the bison population, their main source of food, was being hunted to extinction by arriving settlers. This was such a serious issue to the Indigenous peoples that they included a “famine and pestilence clause” in the treaty. Despite negotiating that provision, successive governments have failed to ensure First Nations enjoyed food or health security. Indeed, these, as well as economic insecurity, remain serious issues, with food insecurity alone ranging from the horrific average rate of 48% to the genocidal figure of 60% in too many First Nations communities.
Treaty 10 was not signed until 1906 — 25 years after the agreement between CP Railway and Canada. Even then, this treaty was nearly immediately breached with both the Canoe Lake Cree First Nation and English River First Nation not being given the full amount of reserve land promised.
There are also further concerns. Although, according to the government, treaties extinguished Indigenous land “ownership,” all the First Nations involved maintain that they agreed to share, not sell, their lands.
There are also disputes about the nature and extent of the rights covered by these treaties. It is well recognized that during their negotiation, government representatives made oral promises that were not then reflected in the written versions of the agreements, otherwise known as the treaties.
The Supreme Court of Canada in R. v. Badger created the principles to govern treaty interpretation in light of these facts. Furthermore, Justice Sopinka wrote that even when the written version of an agreement was faithful to the oral promises, there were still linguistic and cultural barriers and unfamiliarity with the common law system that created an obligation to examine treaties in a special light. Treaties must be interpreted in the sense that they would naturally have been understood by Indigenous peoples at the time of signing.
These facts may be uncomfortable for Canadians to hear and learn. However, Canadians agreed to grapple with this difficult past in pursuit of a brighter future. Canada has adopted the United Nations Declaration on the Rights of Indigenous Peoples, many articles of which focus on remedying past colonial wrongs and rely on the good-faith negotiation of nation-to-nation relationships with Indigenous peoples. The government has committed to implementing the Calls to Action of the Truth and Reconciliation Commission and the Calls for Justice of the National Inquiry into Missing and Murdered Indigenous Women and Girls.
Most recently, Canada’s commitment to reconciliation with Indigenous peoples was tabled as a top priority for the Canadian government and is included in the mandate letters of all 36 current members of the cabinet. Part of reconciliation requires that Canadians know, understand, acknowledge and work to rectify the truths of our racist colonial past that were for so very long ignored. Only then can we move on in the spirit of reconciliation.
This motion deserves this contextualization and more, dear colleagues, and I thank you for your time.
Meegwetch. Thank you.
Colleagues, I’m going to invoke Senator George Baker, who often said, “I’m going to be brief.” But, unlike Senator Baker, I will be brief.
But I did want to intervene in this debate to make a couple of points to, as Senator Pate said, contextualize our discussion. We wouldn’t be having this debate if it weren’t for Senator Tannas and his motion to refer this item to the committee for hearings.
As other speakers have made clear — the debate, such as it was in the legislature of Saskatchewan, two speeches, no witnesses, no committee; the other chamber, no witnesses, an opposition day debate and a unanimous motion — it was only in the Senate of Canada that we not only had a debate but we also heard witnesses.
And the contextualization of this motion, this constitutional amendment, that you have heard today and as we heard in committee, and indeed as we heard when the motion was first presented, I think, is a tribute to at least a Senate that won’t be railroaded — pun intended.
But I think it also behooves us to ask what our role is in the Senate on such a motion. My view, which I would like to share with you, is that we have to assure ourselves that the motion is constitutionally appropriate and that we are exercising our role as prescribed in the Constitution for amendment purposes appropriately.
I want to assert that we have exercised our constitutional role and this motion, and the amendment it reflects is a constitutionally appropriate mechanism and a constitutionally appropriate conclusion.
But why do I want to speak?
I want to speak because I regret that in the report of the committee there were not observations that also reflected the concerns that we heard, quite apart from whether it is constitutional, which is our primary question. But there were policy concerns raised in the hearings and confirmed in the questioning by senators and, indeed, you have heard some of them today.
I want to put on the record that those are appropriate policy concerns to raise as context, but they are not appropriate to determine whether you support the legislation. I know that’s a fine point, but I’m going back to what the role of the Senate is with respect to constitutional amendments originating in a province.
Senators from Alberta and Manitoba, should your provinces choose to initiate a constitutional amendment as Saskatchewan did, you would be treated the same way. It’s up to the province to initiate this.
And, by the way, the Senate only has a suspensive role, not a determinative one, in these amendments.
So when you hear the context of the debate today, and perhaps other days this week, remind yourself of what our role is and what our obligation is as a Senate. Please support the amendment. But also recognize that the policy issues of retroactivity, of engaging in amendments in the context of litigation, is not done without some degree of trepidation, at least on my part, and I’m sure on others.
Thank you.
