Multi-billion dollar safe drinking water settlement includes unique dispute resolution process

A promise made by the Trudeau Liberal government in 2015 to get rid of all long-term drinking water advisories on First Nations has been strengthened by a class action settlement.

“It’s a legal obligation now,” said counsel Harry LaForme of Olthuis Kleer Townshend (OKT).

“That whole notion that the water issue is a political issue to do the best they can and is not enforceable by law, for the 250 (First Nations) we have, that’s now changed,” said LaForme. “Their promise, at least to the class members that we have, is now no longer just their goodwill.”

In December 2021, an $8 billion settlement of two national class-action lawsuits was approved by the Federal Court and Manitoba's Court of Queen's Bench.

At this point, said LaForme, at least 250 First Nations and 140,000 on-reserve individuals will be financially compensated. LaForme’s law firm represented Neskantaga First Nation and Curve Lake First Nation in the case that was filed in Federal Court.

LaForme expects that number to grow and he said that’s a disturbing thought. He recalled his mother collecting water from the streams and the ponds and boiling it when he was a youngster on the Mississaugas of the Credit First Nation. But he also remembers having that corrected when he was in his teens.

“I knew there was a bunch of First Nations that still have water problems…but I never appreciated the numbers. When I started to appreciate the numbers, I was astounded simply because this is Canada, right? We can fix that. We ought to be able to fix that,” said LaForme.

The settlement covers First Nations and their residents who were subject to a water advisory for at least one year between Nov. 20, 1995 and June 20, 2021. First Nation governments that meet these criteria may opt into the settlement and will receive a no-strings attached amount of $500,000.

Individual settlements are based on compensation grids for individual damages and specified injuries set out in the agreement. If there is a dispute over compensation, third party assessors, who have been named in the agreement, says LaForme, will become involved.

The settlement sets out $1.5 billion in compensation for individuals.

Whatever compensation their residents receive, First Nations will get 50 per cent of that amount (those funds will not be taken from individual payments).

“It’s abundantly clear, I think, to everyone…when you try to compensate for something like that…no amount of money can do that. You can’t get on the right number. It’s almost virtually impossible to do that because money can’t fix that harm done to you and what it’s done to your community. So you just do the best you can because that’s all we have and that’s all our system is…We can give you money and other things and that’s what we tried to do,” said LaForme.

In late 2019, OTK joined forces with McCarthy Tétrault law firm, which was representing Tataskweyak Cree Nation. Both law firms were fighting on behalf of their clients to address prolonged drinking-water advisories on First Nations reserves. Both brought national class action litigations against Canada. They claimed the federal government had breached its obligations to First Nations and their members by failing to ensure that reserve communities have clean water. They alleged Canada had breached its fiduciary duties.

Initially, said LaForme, the intention had been to pursue the matters in separate court proceedings and eventually merge them. However, the Federal Court and Manitoba Court of Queen’s Bench agreed to sit together to hear the two cases.

With a trial set for early January 2022, Canada came to the table.

“Canada was anxious and eager to negotiate with us to see if we could reach a settlement,” said LaForme.

However, while the negotiations were ongoing, the case remained on the trial calendar.

“It was important for us to let them know that negotiations were not going to stop until we got a settlement and if the court date came up in that process, we were not going to abandon the court date. That was always going to be there. It was kind of a pressure point,” said LaForme.

Canada proved they were serious about negotiating a settlement, he said, when they consented to the class action without it being certified by the court first.

“That probably saved a year of going to court. And that was the first clue that yes, this sounds like Canada will be amenable to settlement talks on this. And they were,” said LaForme.

He also credits Canada for being open to a unique resolution dispute process.

If aspects of the settlement agreement aren’t addressed in “best efforts” time frames, as LaForme puts it, then the resolution dispute process kicks in. Those aspects include construction, upgrading, operation, and maintenance of water infrastructure in First Nations communities; modernization of Canada’s First Nations drinking water legislations; and the creation of a First Nations Advisory Committee on Safe Drinking Water.

“In the extent that it’s possible to do so,” said LaForme, the process involves the hearings or negotiations taking place on the impacted First Nation reserve so that the community can attend. If there is an Indigenous language that is predominately used in that community, then the mediator will have an interpreter. Elders can be involved.

“Most important, the legal traditions and justice issues as identified by the First Nation community, what they might have been in the past, have to be used and considered in the decision-making so that we’ve got joint decision-making which is First Nations and Canada now under a system which allows and must recognize the legal traditions and protocols of the Indigenous peoples,” said LaForme.

Such a dispute resolution process would not have been ordered by the court, although the court would have directed the parties to work out a process, he said.

LaForme, who spent 25 years as a judge, says while he can’t guarantee it, his “educated guess” is that litigation would not have resulted in a higher dollar amount for either the First Nations or individuals.

Also unique to these negotiations points out LaForme was that there were five Indigenous lawyers involved, three from McCarthy Tétrault and two, including LaForme, from OKT.

“That is significant because language is important, approach is important…If you’re a lawyer from Bay Street and you’re talking to a First Nation about these things, you don’t know the language, you don’t know the respect, you don’t appreciate the protocols. We do,” said LaForme, who is Anishinaabe.

“We know how you can insult a First Nation community. We know where their anger comes from and what you have to do to alleviate some of that anger or to regain that trust. We understand that. We’ve lived with it. And so that becomes very important.”

LaForme knows there are First Nations who have experienced boil water advisories who fall outside of the starting date of this settlement and points out that limitation periods are standard.

However, he said, “this was the date that was fixed up because it was the best date and the most generous to First Nations that would be able to get more First Nations involved and individuals involved.”

And for those First Nations who suffered boil water advisories for less than the settlement’s one-year time frame, as well as those who suffered prior to Nov. 20, 1995, LaForme says this settlement doesn’t impact their rights to pursue their own legal recourse.

LaForme is hopeful that the compensation formula that is part of this settlement can be used as a template for other settlements going forward.

“Canada’s going to have to address them one way or another and I don’t know how that will be. One hopes that will be through negotiation because … I would like them to take the dispute resolution process we put forward and worked on, which I think is really unique, and use that to settle the other issues they have,” said LaForme.

Also part of the agreement is the creation of a $400 million First Nation Economic and Cultural Restoration Fund; at least $6 billion to support reliable access to safe drinking water on reserve; and support for First Nations to develop their own safe drinking water bylaws and initiatives.

The claims process under the settlement opened to submissions on March 7. First Nations communities have until Dec. 22 to file their claims, while individuals have until March 7, 2023.

Local Journalism Initiative Reporters are supported by a financial contribution made by the Government of Canada.