No Need to provide Financial Statements to AANDC for now-Onion Lake and Sawridge

Case Synopsis:

AG of Canada and Minister of AANDC v.

Onion Lake Cree Nation and Sawridge First Nation

With regard to the First Nations Financial Transparency Act

Federal Court Decision October 23, 2015


Facts of the Case:

The Minister of AANDC brought an application in Federal Court to force Sawridge, Onion Lake, Cold Lake, Athabasca Chipewyan, Thunderchild  and Ochapowace First Nations  to provide AANDC with their Financial Statements/audits.

Onion Lake and Sawridge brought an application to stop further prosecution of the Minister’s application or alternatively to get a stay (put on hold) on the application. Onion Lake also brought an application for mandatory injunctive relief to get the $1million plus returned that the Minister was withholding from them and stop further withholdings.

Onion Lake brought an action in the Federal Court and Sawridge brought a case in the Alberta Court of Queen’s Bench to challenge the constitutionality of the First Nations Financial Transparency Act. 

On November 27, 2014, the Minister issued a press release saying he was bringing a court challenge to get Sawridge to produce their statements and initiated the court action on December 8, 2014.  Sawridge then filed their case in the Court of Queen’s Bench to challenge the validity of the Act based on their asserted aboriginal and treaty rights, a breach of fiduciary and trust obligations, a breach of its right to self government, a breach of the duty to consult, and a violation of s. 15 of the charter-equality.

Onion Lake received their letter from the Minister on Oct. 27, 2014 warning them they would have their funds withheld if they did not provide their financial statements.  On November 27, 2104, the Department told Onion Lake they had withheld $159,605.  Chief Fox in his affidavit said that as of May 14, 2015, AANDC had already withheld funding of $1,034,018. These funds were for band employee band benefits for 800+ employees.  It also disrupted funding for the occupation of 15 houses on the reserve. 

On November 26, 2014, Onion lake commented a legal action against the Government of Canada in the federal court for damages and injunctive reliefs against the Crown based on allegations of Charter based discrimination, failure to consult, a breach of fiduciary duties and a breach of promises made by the Crown in Treaty 6.


The two First Nations asked that they be exempt from the statutory disclosure provisions of the FNTA pending the resolution of the legal issues they have raised.  Alternatively they ask for a stay of the Minister’s application pending their challenges to the Act in Federal and Court of Queen’s Bench.


The court decided that he would chose the stay because it was more appropriate and less disruptive than an interim order exempting a party from valid legislation. 

The court by its rules can stay an application if that claim is being proceeded with in another court of jurisdiction.  It is based on this rule that a stay of the Minister’s application was issued. 

The Court further discussed whether an application such as this can be more appropriately resolved by an action with full discovery and trial.  Applications are speedy and cost effective but it denies access to full pre-hearing discovery and benefits of oral evidence.  An action involved the development of considerable evidentiary record.  Where treaty rights and constitutional issues are involved, an action is much better.

The actions of Onion Lake and Sawridge will involve different courts, different treaties and will have different evidentiary records.  All proceedings are in the early stages so will not result in any thrown away costs to any party. 

In balancing of interests, it does not favour the Minister.  He was aware the validity of the FNTA if passed would be challenged.  The day after Onion Lake initiated their action, the Minister withheld funds with no advance consultation.  Then the Minister brought this action on December 8th, 2014.

The Supreme Court of Canada has said that disagreement of the sort raised in the two actions should be the subject of consultation.  And it does not serve the public interest for either party to aggravate a legitimate disagreement that has been properly placed before the courts for resolution.

The Minister’s enforcement action was discretionary though he had power under the Act as was the action he took to withhold funding.  The Minister also has the discretion to impose ongoing administrative penalties for non compliance.  It is with this background that the greater public interest favours the First Nations and the right to move forward with their litigation in the absence of AG’s competing application.

Therefore the court stayed the Attorney General’s application pending further order of the court. 


Onion Lake asked the court for injunctive relief requiring the Minister to reinstate the benefits he withheld and to not allow him to take further such actions.

The court said it must take considerable caution where the interim relief interferes with validly enacted legislation.  The court also accepted that the Attorney General does not hold a monopoly over public interest based solely on the strength of the enforcement of legislative compliance.

 The test for injunctive relief is 3 fold: 1.  Serious issue to be tried.  2.  Irreparable harm 3. Balance of convenience favours the grant of relief

 In this case, there is a serious issue to be tried.

The court held on the second ground that irreparable harm was not proven by Onion Lake. 

Onion Lake said that there would be harm if their financial statements were disclosed publicly as they have commercially sensitive information that could be used by their competitors. The Attorney General argued this is only highly consolidated data and shields information that would be advantageous to the First Nations commercial competitors.  The court said the expert evidence provided by Onion Lake was insufficient.  The expert did not look at Sawridge’s financial information  and did not touch on the financial affairs of Onion Lake and there were no examples of financial information that could harm Onion lake’s commercial interest.

The issue of the 800 employees benefits was not clear to the court if there was any harm as the court could not figure out if the money could come out of another source of band revenue or if there was personal hardship to the employees and their families of if the Minister was interfering with recruitment or tenure. The Justice felt more evidence was needed.

 On the evidence of the 15 homes for needy families, the court again did not understand whether the homes were built or not built, and if they were built why the families could not move in. 

 Withholding of money can be compensable in damages and not irreparable harm. If there were non compensable issues on the membership or employees, there was no proof of irreparable harm to them.

Onion Lake is free to return to the court at any time with further evidence of irreparable harm on a stronger evidentiary record. 

The court was clear that the Attorney General should not interpret this outcome of the endorsement of the actions taken to date by the Department.  The Crown has an ongoing duty to consult and the Minister is required to carefully consider the prejudicial effects of further administrative action on the members of the bands.  This is particularly true when the validity of the Act is before the courts. 

The crown’s failure to consult before withholding funding from the First Nations is likely to be a consideration in the face of evidence showing non compensable injury to band members going forward. 

Political Implications:

Prime Minister Trudeau-elect said he would repeal or amend legislation that did not have proper First Nations consultation/consent.  The Financial Transparency Act is one that has caused great furor among First Nations.  This year many First Nations have refused to comply with giving up their audits.  This should be one of the First pieces of legislation that should be appealed.  

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