A Watershed Decision: Supreme Court Rules that Compensation for Flooded Reserve Land is Insufficient

The Supreme Court of Canada (“SCC”) recently released its decision in Southwind v Canada, 2021. In an 8-1 ruling, the SCC held that $30 million in compensation to the Lac Seul First Nation (“LSFN”) for the federal government’s flooding of its Reserve land was insufficient, and ordered the case back to trial for re-assessment.

The decision was a majority decision with Justice Cote dissenting. The case considers the application of the principles of equitable compensation within the context of Canada’s fiduciary duty to Indigenous Peoples. In this case, the SCC established a framework on how to equitably compensate Indigenous communities for the unauthorized operation of hydroelectricity projects on Reserve land without consent.

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