Judgments

[1995] 3 F.C. 461

T-1764-94

St. Mary’s Indian Band and St. Mary’s Indian Band Council (Applicants)

v.

Minister of Indian Affairs and Northern Development (Respondent)

and

The Attorney General of British Columbia (Intervenor)

T-1771-94

Columbia Lake Indian Band and Columbia Lake Indian Band Council (Applicants)

v.

The Minister of Indian Affairs and Northern Development (Respondent)

and

The Attorney General of British Columbia (Intervenor)

T-1773-94

Lower Kootenay Indian Band and Lower Kootenay Indian Band Council (Applicants)

v.

The Minister of Indian Affairs and Northern Development (Respondent)

and

The Attorney General of British Columbia (Intervenor)

T-1769-94

Tobacco Plains Indian Band and Tobacco Plains Indian Band Council (Applicants)

v.

The Minister of Indian Affairs and Northern Development (Respondent)

and

The Attorney General of British Columbia (Intervenor)

Indexed as: St. Mary’s Indian Band v. Canada (Minister of Indian Affairs and Northern Development) (T.D.)

Trial Division, Reed J.—Vancouver, July 6, 7; Ottawa, August 17, 1995.

Native peoples — Chief, band council passing by-laws regulating gambling casinos on reserve — Indian Act, s. 81(1)(m) neither transferring nor intending to transfer legislative authority to control casinos to Indian chiefs or bands — Band councils without authority to operate or regulate casinos unless licensed by province — Interests beyond those of Band itself proper considerations in Minister’s exercise of disallowance power pursuant to Indian Act, s. 82(2) — Issuance of by-law not within band council’s jurisdiction.

This was an application for judicial review of a ministerial order, made pursuant to the Indian Act, subsection 82(2), disallowing a by-law passed by an Indian band council. The Chief and Council of an Indian Band passed a by-law, pursuant to paragraph 81(1)(m) of the Indian Act, containing a code regulating gambling casinos on the reserve. The Minister of Indian Affairs and Northern Development disallowed that by-law on the ground that the issuing of the by-law was not within the band council’s jurisdiction. The issue for determination was whether paragraph 81(1)(m) of the Indian Act authorizes Indian bands to enact such by-laws.

Held, the application should be dismissed.

Originally band councils were granted limited authority regarding games played on Sundays, subject to prior confirmation by the Governor in Council or the Superintendent General. There was no intention at that time to transfer authority to control gambling casinos to Indian chiefs or band councils, as the operation of all casinos and most forms of gambling was prohibited under the Criminal Code. Authority to regulate the operation of pool rooms, dance halls and other places of amusement on reserves rested with, and continues to rest with, the federal government. In 1951, pursuant to an extensive revision of the Indian Act, authority to control public games was no longer limited to Sundays and band council by-laws automatically came into force unless disallowed by the Minister. Later amendments to the Criminal Code continued to prohibit gambling except under licence from a province.

Given this legislative history, it was clearly not the intention of Parliament to confer upon Indian band councils the authority to operate or regulate the operation of casinos in derogation of the Criminal Code. Had Parliament intended to confer such authority upon Indian band councils, it would have done so in more specific language. Even if paragraph 81(1)(m) could be interpreted to accord authority to band councils to control the operation of gambling casinos, the provisions of Part VII of the Criminal Code take precedence and prevent any regulation in derogation thereof.

The Minister’s subsection 82(2) disallowance power allows the Minister to act on governmental concerns beyond those directly relevant to the Indian Band which issued the by-laws in question. Thus the agreement reached between the federal and provincial governments giving the latter exclusive authority over casinos could properly be a determining factor in the federal government’s decision to exercise its disallowance power.

Despite its legislative nature, exercise of the subsection 82(2) disallowance power is not insulated from either review or invalidation for jurisdictional error. Subordinate forms of legislative authority such as ministerial orders are subject to review not only for conformity with the Constitution but also to ensure that they are within the authority of the authorizing statutory provisions.

The scope of paragraph 81(1)(m) does not confer upon Indian band councils authority to operate or regulate the operation of casinos on their reserve, unless licensed by a province.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

An Act to amend the Criminal Code (lotteries), R.S.C., 1985 (1st Supp.), c. 52, s. 3.

Canadian Charter of Rights and Freedoms, being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, No. 44].

Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.) (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1) [R.S.C., 1985, Appendix II, No. 5].

Criminal Code, R.S.C. 1927, c. 36, ss. 226 (as am. by S.C. 1938, c. 44, s. 12), 227 (as am. by S.C. 1943-44, c. 23, s. 7), 228, 229 (as am. by S.C. 1947, c. 55, s. 4), 230, 231, 232, 233, 234, 235 (as am. by S.C. 1938, c. 44, s. 13), 236 (as am. by S.C. 1934, c. 47, s. 7; 1943-44, c. 23, s. 8).

Criminal Code, R.S.C., 1985, c. C-46, Part VII.

Criminal Law Amendment Act, 1968-69, S.C. 1968-69, c. 38, s. 13.

Indian Act, R.S.C., 1927, c. 98, ss. 95, 101 (as am. by S.C. 1930, c. 25, s. 9), 185 (as am. idem, s. 17).

Indian Act, R.S.C., 1985, c. I-5, ss. 73, 81 (as am. by R.S.C., 1985 (1st Supp.), c. 32, s. 15), 82, 88.

Indian Act (The), S.C. 1951, c. 29, ss. 80, 81(2).

CASES JUDICIALLY CONSIDERED

APPLIED:

Twinn et al. v. Canada (Minister of Indian Affairs and Northern Development), [1987] 3 C.N.L.R. 118; (1987), 6 F.T.R. 41 (F.C.T.D.); Nicholson v. Haldimand-Norfolk Regional Board of Commissioners of Police, [1979] 1 S.C.R. 311; (1978), 88 D.L.R. (3d) 671; 78 CLLC 14,181; 23 N.R. 410.

CONSIDERED:

R. v. Jimmy, [1987] 5 W.W.R. 755; (1987), 15 B.C.L.R. (2d) 145; [1987] 3 C.N.L.R. 77 (B.C.C.A.).

REFERRED TO:

Attorney General of Canada v. Inuit Tapirisat of Canada et al., [1980] 2 S.C.R. 735; (1980), 115 D.L.R. (3d) 1; 33 N.R. 304; Maple Lodge Farms Ltd. v. Government of Canada, [1982] 2 S.C.R. 2; (1982), 137 D.L.R. (3d) 558; 44 N.R. 354; Canadian Assn. of Regulated Importers v. Canada (Attorney General), [1994] 2 F.C. 247 (1994), 17 Admin. L.R. (2d) 121 (C.A.).

AUTHORS CITED

House of Commons Debates, 4th sess., 16th Parl., March 31, 1930.

APPLICATION for judicial review of a ministerial order issued pursuant to the Indian Act, subsection 82(1) disallowing a by-law passed by an Indian band council to regulate the establishment of gambling casinos on its reserve. Application dismissed.

COUNSEL:

John L. Finlay and Fiona C. M. Anderson for applicants.

John R. Haig, Q.C. for respondent.

George Copley for intervenor.

SOLICITORS:

Arvay Finlay, and Cooper & Associates, Vancouver, for applicants.

Deputy Attorney General of Canada for respondent.

Attorney General of British Columbia for intervenor.

The following are the reasons for order rendered in English by

Reed J.: The main issue in this case is whether paragraph 81(1)(m) of the Indian Act, R.S.C., 1985, c. I-5, as amended R.S.C., 1985 (1st Supp.), c. 32, section 15 authorizes the enacting of by-laws by Indian bands to regulate the establishment of gambling casinos on their reserves.

The four applicants named in the four applications listed in the style of cause all passed by-laws for this purpose. While differences exist among the four applicants, these are not relevant for present purposes. It is agreed that whatever decision is reached with respect to the St. Mary’s Indian Band (T-1764-94) will also apply to the others.

On May 12, 1994, the Chief and Council of the St. Mary’s Indian Band passed a by-law pursuant to paragraphs 81(1)(c), (m), (g) and (r) [as am. idem] of the Indian Act. On June 10, 1994, the Minister of Indian Affairs and Northern Development disallowed that by-law pursuant to his authority under section 82 of the Act.

The Minister’s reason for disallowing the by-law, set out in a letter dated June 17, 1994, from Charles A. Webb, Director of Band Governance of the Department of Indian Affairs, was based to a significant extent, if not totally, on the opinion that the issuing of the by-law was not within the Band Council’s jurisdiction. The by-law in question contains a very sophisticated and complete code for regulating casinos. There is no doubt that it was passed after a thorough study and on the basis of a well thought-out plan. There is also no doubt that the St. Mary’s reserve has limited opportunities for economic development and that the establishment of a casino on the reserve would lead to substantial revenue inflows for the Band.

While the by-law relies upon a number of paragraphs of subsection 81(1) of the Indian Act it is paragraph 81(1)(m) which is particularly relevant:

81. (1) The council of a band may make by-laws not inconsistent with this Act or with any regulation made by the Governor in Council or the Minister, for any or all of the following purposes, namely,

…

(m) the control and prohibition of public games, sports, races, athletic contests and other amusements;

Legislative History

The origin of paragraph 81(1)(m) is found in an amendment to sections 101 and 185 of the Indian Act [R.S.C. 1927, c. 98], in 1930.[1] The authority granted by that amendment was limited. It related only to games played on Sundays. In addition, any rule or regulation which might be made by the chief or chiefs of a band had to be confirmed by the Governor in Council[2] and any by-law, rule or regulation made by a band council was subject to approval and confirmation by the Superintendent General (i.e. the Minister responsible for Indian Affairs).[3] The relevant texts provided:

101. The chief or chiefs of any band in council may … subject to such confirmation [i.e., by the Governor in Council], make rules and regulations as to

…

(j) Controlling or prohibiting participation in, or attendance at, public games, sports, races, athletic contests or other such amusements on the Sabbath.

…

185. …

2. The council may also make by-laws, rules and regulations, approved and confirmed by the Superintendent General, regulating all or any of the following subjects and purposes, that is to say:—

…

(jj) Controlling or prohibiting participation in, or attendance at, public games, sports, races, athletic contests or other such amusements on the Sabbath.

At the time, the Superintendent General already had had, since at least 1927, authority to regulate the operation of pool rooms, dance halls and other places of amusement on reserves.[4] That authority continued and continues today, in subsection 73(1) of the Indian Act, R.S.C., 1985, c. I-5, although, it is now held by the Governor in Council. Subsection 73(1) states:

73. (1) The Governor in Council makes regulations

…

(e) for the operation, supervision and control of pool rooms, dance halls and other places of amusement on reserves;

It is clear from the legislative debates that the authority conferred by the amendment of 1930, in paragraphs 101(j) and 185(2)(jj) was intended to cover what might be called spectator sports and particularly the conduct of the public at those games: the consumption of alcohol and the taking of “collections”.[5] This last I take to be the charging of admission on Sundays. Certainly, at the time there was no intention to transfer authority to control gambling casinos to Indian chiefs or band councils. The operation of all casinos and most other forms of gambling was prohibited by Part V of the Criminal Code.[6]

In 1951, an extensive revision of The Indian Act occurred.[7] Sections 101 and 185 were repealed and became section 80 (now 81). Authority to control public games was no longer limited to Sundays and instead of requiring approval by the Governor in Council (or Minister of Indian Affairs), a mechanism was adopted whereby band council by-laws would come into force automatically unless disallowed by the Minister. Subsection 81(2) (now 82(2)) read:

81. …

(2) A by-law made under section eighty shall come into force forty days after a copy thereof is forwarded to the Minister … unless it is disallowed by the Minister within that period, but the Minister may declare the by-law to be in force at anytime before the expiration of that period.

The operation of casinos and practically all types of gaming houses continued to be prohibited by the Criminal Code.[8] In 1967-1968 amendments to the Code [Criminal Law Amendment Act, 1968-69] were made which allowed for the operation and licensing of lotteries and gambling by the provincial and federal governments.[9] In 1985 those provisions were again amended to remove the jurisdiction of the federal government and leave the field to the provincial governments [An Act to amend the Criminal Code (lotteries)].[10] It is in this context that the scope of paragraph 81(1)(m) must be assessed.

Statutory Interpretation

Counsel for the applicants argues that the purpose of conferring what is now section 81 authority on Indian band councils is to provide them with a measure of self-government. The purpose is to carve out an area for band control which can supplant otherwise relevant federal or provincial legislation. He argues that when the band has legislated on a subject with respect to which it has been given authority, those provisions can operate in derogation of federal or provincial legislative provisions which would otherwise be applicable: see R. v. Jimmy, [1987] 5 W.W.R. 755 (B.C.C.A.). Section 81 authority, in any event, will take precedence over provincial legislative enactments or instruments as a result of the provisions of section 88 of the Indian Act.

The argument that the exercise of an authority conferred by section 81 can operate to supplant otherwise applicable federal legislation is also based on the opening words of section 81. Those words limit the band council’s authority in so far as its exercise may be inconsistent with the Indian Act or with any regulation made by the Governor in Council or the Minister of Indian Affairs under that Act. A standard clause in many statutes is to make the conferral of subordinate legislative authority subject to “any other Act”. This was not the wording adopted in the case of section 80 (now 81) when it was enacted. Thus, counsel argues that while section 81 authority is expressly limited by the Indian Act or provisions made under that Act, it is not limited by federal legislative provisions generally. The express reference to the Indian Act, and provisions made thereunder, by implication, excludes other federal enactments.

I do not find it necessary to decide whether band council by-laws, as a general rule, operate as a derogation from federal or provincial laws. I find it sufficient to say that I do not think it was the intention of Parliament, in enacting paragraph 80(m) (now 81(1)(m)), to confer on Indian band councils authority to operate, or regulate the operation of casinos in derogation of what is now Part VII of the Criminal Code [R.S.C., 1985, c. C-46].

In the first place, the authority granted, with respect to the games in question, is to control or prohibit those games. This assumes that the games can operate freely in the absence of any such control or prohibition. This was not true for gambling casinos in 1930, nor in 1951. It is not true now except under licence from a province. Secondly, if Parliament had intended to confer on Indian band councils the authority to operate or to regulate the operation of casinos on reserves, I think it would have done so in more specific language than that used in paragraph 80(m).

In addition, when confronted with a statutory provision which is general in nature, and one which is more specific, the accepted technique of statutory interpretation is to read the more specific as an exception to the general. Counsel for the applicants argue that the authority conferred on Indian band councils is more specific than the Criminal Code because it has a limited geographical application—it applies only on Indian reserves. Counsel for the intervenor argues that the Criminal Code provisions are more specific because they deal only with one kind of game—gambling. Paragraph 81(1)(m ) deals with all types of public games, athletic contests and other amusements. I have been persuaded that in this case the specific/general dichotomy should be assessed by reference to the subject-matter of the legislation not the scope of its geographical application. When paragraph 81(1)(m) of the Indian Act and Part VII of the Criminal Code are read together—I read the specific out of the general. Thus, even if paragraph 81(1)(m ) could be interpreted to accord authority to band councils to control or prohibit the operation of gambling casinos, the provisions of Part VII of the Criminal Code take precedence and prevent any regulation in derogation thereof.

Ministerial Disallowance

Although it is not strictly necessary to do so, I will set out some of the arguments which were made with respect to the Minister’s disallowance of the by-laws in question.

Counsel for the applicants argued that in exercising that authority the Minister must, as a trustee for the Band, consider only the welfare of the Band. It was argued that he must, therefore, consider the economic benefits which would accrue to the Band, as well as any negative consequences that might arise. It was argued that it would be improper for him to disallow the by-law because, for example, there had been a federal-provincial agreement reached in 1985 whereby the federal government had agreed to leave the operation and regulation of gambling casinos to the provinces.

I interpret the Minister’s disallowance power in subsection 82(2) as allowing the Minister to act on governmental concerns beyond those directly relevant to the Indian Band whose by-law is under consideration. I adopt the analysis of Mr. Justice Strayer [as he then was] in Twinn et al. v. Canada (Minister of Indian Affairs and Northern Development), [1987] 3 C.N.L.R. 118 (F.C.T.D.), at page 120:

Surely the purpose of empowering the minister to disallow bylaws is in part to enable him to take into account larger interests going beyond those of the Band itself …

Although Mr. Justice Strayer was concerned with a disallowance which was described as being in the interest of all Indians generally, I consider his comments to be wide enough to encompass decisions taken by a Minister for social policy, political or financial reasons other than those directly relevant to Indians.[11] Thus, even if the Minister’s decision had been taken because the federal government reached an agreement with the provincial governments, in 1985, whereby the latter would be given exclusive authority over casinos, I could not interpret that as an improper use of the disallowance power.

I am not persuaded, however, that a categorization of the Minister’s disallowance power as legislative in nature would insulate it from review as counsel argues. Reference was made to the decisions in Maple Lodge Farms Ltd. v. Government of Canada, [1982] 2 S.C.R. 2 and Canadian Assn. of Regulated Importers v. Canada (Attorney General), [1994] 2 F.C. 247(C.A.). I do not understand why characterizing the disallowance power as legislative creates the immunity which is claimed. Legislative activity by a legislature is necessarily subject to scrutiny and comment from those affected before the legislation is passed. This is ensured by the public process of first, second and third readings in the House of Commons and the Senate and, in the case of provincial legislation, by a comparable process in provincial legislative assemblies. Subordinate legislative activity (regulations), by order in council is subject to public scrutiny. Those who will be affected are given an opportunity to comment before those legislative provisions are promulgated. Pre-publication requirements ensure that this occurs. Why, then, should an even lesser form of subordinate legislative activity, for example, by ministerial order be immune from such pre-disclosure and opportunity for review merely because it is labelled “legislative”?

Not only is legislative activity, in general, subject to review by those to be affected before enactments are passed, it is also subject to being invalidated if not within the scope of the relevant authority. Thus, statutes are subject to review for conflict with the Canadian Charter of Rights and Freedoms [being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.) [R.S.C., 1985, Appendix II, No. 44]] and to ensure that they fall within the legislative jurisdiction of Parliament, or the provincial legislatures, as the case might be, pursuant to the Constitution Act, 1867 [30 & 31 Vict., c. 3 (U.K.) (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1) [R.S.C., 1985, Appendix II, No. 5]]. Subordinate legislation (regulations) are subject to review not only for conformity with the Constitution but also to ensure that they are within the authority of the authorizing statutory provisions. They will be declared to be ultra vires if they exceed that authority. I do not understand why still more subordinate forms of legislative authority (e.g. by ministerial order) should be accorded a greater immunity from review, merely because it is labelled “legislative”, than pertains in the case of legislative acts proper. Also such a rule does not accord with the abandoning, as relevant for the purposes of judicial review, of the categories of governmental activity, which occurred in Nicholson v. Haldimand-Norfolk Regional Board of Commissioners of Police, [1979] 1 S.C.R. 311. I am not persuaded that the exercise of the Minister’s disallowance power is subject to the immunity claimed.

Conclusion

Since I have concluded that the scope of paragraph 81(1)(m) does not confer on Indian band councils authority to operate or regulate the operation of gambling casinos on their reserves, unless licensed by a province, I do not need to rely on the arguments relating to the nature of the Minister’s disallowance power.

For the reasons given this application for judicial review is denied.

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