Judge agrees with First Nations in ruling against OLG and Ontario concerning representation

Press release

Judge agrees with First Nations in ruling against OLG and Province

TORONTO, Dec. 18, 2013 /CNW/ - In 2008, Ontario First Nations [represented by the Ontario First Nations (2008) Limited Partnership or "OFNLP 2008"], the Province, and the Ontario Lottery Gaming Corporation ["OLG"] entered into a Business Agreement which provided among other things securing 1.7% of OLG gross revenue for First Nations.  This settled a $2.1 billion law suit brought by First Nations after the Mike Harris government confiscated 20% of the gross revenue of Casino Rama in 1996.

The Business Agreement provides that OFNLP 2008 has the "right to have a representative ... appointed by the Province as a member of the board of directors of OLG" in accordance with the usual appointment procedures.

Almost six years later, there is still no First Nation representative on the OLG Board.  OFNLP 2008 took the issue to an impartial arbitration tribunal, in accordance with the procedure laid out by the Business Agreement.  The Province and OLG argued that the arbitration panel did not have the jurisdiction to even consider the merits of the First Nation grievance.  They argued that appointing a First Nation representative to the OLG Board was a matter of unfettered Crown prerogative or discretion.

A positive ruling by the independent arbitration panel on the jurisdictional issues raised by the Province and OLG was appealed by them to the Ontario Superior Court of Justice.  In a forceful judgment issued on December 13, Mr. Justice Lederer rejected the position of OLG and the Province.  As a result of this ruling, OFNLP 2008 now has the right to go back to the arbitration panel and seek a declaration that the provincial Crown is in breach of its obligation to appoint a First Nations representative to the OLG Board.

The judgment contains many strong references critical of the position of Ontario and OLG.  Their argument that there is no possible legal relief against the failure to make the Board appointment is described as "more than a little disquieting".  The Judge asked this rhetorical question:  "... if we cannot rely on the Province to stand behind a contract it has made, knowing that the other parties are relying on its terms, what confidence can we have that our government will respect other obligations it has taken on."  Does legal theory around the Crown prerogative allow the Province "to ignore, with impunity" the contractual obligation to appoint a First Nations representative to the OLG Board?  According to the Judge, "it should not be a common or simple matter for the Crown to breach its agreements with impunity".

OFNLP 2008, on behalf of the 132 First Nations it represents, is pleased with the ruling of the Superior Court of Justice.  According to OFNLP 2008 President Steve Williams:  "All Ontario citizens should be outraged that the Province has refused for more than five years to live up to its simple contractual commitment to appoint a First Nations representative to the OLG Board.  First Nation rights and business interests have been seriously prejudiced.  First Nations have an ancient tradition of participation in large-scale gaming, and OLG could have benefited from the counsel of First Nations.  Some of the scandals and strategic errors associated with OLG could have been avoided."