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A landmark settlement agreement has been reached in Nunavut Tunngavik Inc. (NTI) lawsuit against the Government of Canada. NTI, represented in the lawsuit by Nelligan O’Brien Payne LLP lawyer Dougald Brown, received $255.5 Million in compensation from the Federal government.

A tentative settlement agreement was reached and initialed by officials representing the parties involved on March 5, 2015, shortly before trial, which was scheduled for 15 to 20 weeks starting on March 9, 2015. The agreement was approved by NTI President Cathy Towtongie, Aboriginal Affairs Minister Bernard Valcourt and Nunavut’s Premier, the Honourable Peter Taptuna in a signing ceremony on May 4, 2015 in Iqaluit.

Background to the Settlement

NTI is a corporation established to represent the interest of beneficiaries of the Nunavut Land Claims Agreement (‘NLCA’). The NLCA resulted from treaty negotiations between the Federal Government and the Inuit residing in the eastern Arctic that began in the 1970s. The NLCA was signed in 1993, followed by the creation of the Territory of Nunavut – a new jurisdiction carved out of the Northwest Territories in 1999. In consideration for the rights and ongoing benefits promised by the Agreement, the Inuit surrendered their Aboriginal title to lands and waters in the Nunavut Settlement Area.

The lawsuit was a large and complicated piece of litigation, launched by NTI in December 2006 in the Nunavut Court of Justice after a breakdown in the negotiations for renewal of the NLCA implementation contract. One of the biggest challenges faced by NTI had been the Federal Government’s unwillingness to consent to submit matters for arbitration. The Government of Nunavut was added as a third party to the lawsuit in May 2008. In the action, NTI claimed that the Federal Government had breached the NLCA by failing to fairly and fully implement a number of ongoing obligations outlined in the agreement. 

The breaches included the Government’s failure to meet ongoing obligations to achieve a representative Inuit workforce through the implementation of adequate employment training initiatives guided by an effective Inuit labour force analysis. Inuit make up approximately 85% of the population of Nunavut, but as of December 2009, only about 51% of the positions within the Government of Nunavut were occupied by Inuit, and as of 2006, less than 40% of the positions within the Government of Canada in Nunavut were occupied by Inuit. In addition, Federal Government procurement policies, intended to increase participation of Inuit firms in competitions for government contracts for Nunavut had not been implemented.

In a June, 2012 summary judgment on one part of the much larger lawsuit, the Nunavut Court of Justice had found that NTI was entitled to $14.8 million in damages for the failure of the Government of Canada to implement a General Monitoring Plan in accordance with Article 12.7.6 of the NLCA. The Nunavut Court of Appeal affirmed that the government had breached the NLCA, and that NTI was entitled to substantial damages in a decision released in April, 2014. However, it found that the precise amount of damages should be determined after the court heard all of the damages in the main trial in March, 2015.

Key Elements of the Settlement

There were several key elements of the settlement, involving renewed commitments to the implementation of employment training, a new Inuit labour force analysis, a new dispute resolution process, and the government procurement policy for Nunavut.

In particular, NTI committed to spend $175 Million of the settlement amount on providing training for Inuit employment. It will create a new organization, the Nunavut Inuit Training Corporation, to hold and manage the funds, and to support training initiatives for Inuit on the skills and qualifications needed for government and other employment. The remaining $85 Million of the settlement will be invested by NTI.

The Government of Canada agreed to carry out an extensive new Nunavut Inuit Labour Force Analysis (NILFA), in close consultation with the NTI and the Government of Nunavut, and funded by sources outside of the settlement amounts. A proper analysis will provide valuable information on the best ways to achieve government employment levels in Nunavut that are representative of the Inuit population through the development of effective employment and pre-employment training.

The settlement agreement also requires that the original dispute resolution clause in NLCA Article 38 be replaced by a new dispute resolution process. The new process will allow a party to go to arbitration without the other party’s consent, as was previously the case.

In addition, the settlement agreement requires the Government of Canada to develop a mandatory, Nunavut specific procurement policy, related to goods, services, leases and construction delivered within or into the Nunavut Settlement Area. The objective of the policy is to increase the participation of Inuit firms competing for government contracts.

The settlement agreement was a good outcome for the Inuit of Nunavut. It not only included a large settlement amount and avoided the costs and delays of litigation, but also provided a framework for moving forward on implementing the NLCA effectively, and reinforced the Federal Government’s obligation to honour the agreement.

This content is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. © 2021 Nelligan O’Brien Payne LLP.

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