Federal Court - Christian Aboriginal Infrastructure Developments ...

Federal Court - Christian Aboriginal Infrastructure Developments ... Federal Court - Christian Aboriginal Infrastructure Developments ...

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Page: 274 political interest can be found to be analogous to a financial interest, for the purpose of determining if there was reasonable reliance. I accept that proposition. [1041] The statutory mandate set out in the DIAND Act charges that Department with economic development in Yukon . For obvious reasons, it is difficult to find that the Defendant has a “financial interest” in promoting a transaction or enterprise in respect of which the representation was made 2010 FC 495 (CanLII) but in the particular circumstances of this case, it is undeniable that the Defendant had a special, particular interest in the development of the mill. [1042] The Defendant had a direct political interest in seeing the mill project proceed. The issue of forestry in Yukon may have been a small political issue for the rest of Canada, but in Yukon, and for the Department, it was an issue of utmost importance. This is clear from the record. [1043] There were petitions, protests, blockades of the Regional Office, and meetings with Ministers. The number of letters which were sent both to the Regional Office and to Ottawa also speaks to the importance of the issue to Yukoners. There are numerous other examples in the record of the politically charged nature of the forestry issue in Yukon; see for example Exhibit P-46; and Exhibit P-80, Tab 82. [1044] In addressing many of the concerns, DIAND introduced regulatory changes that required local processing. This required a local mill. There is evidence on the record in this trial that shows that it was a condition for the grant of the THA to KFR that a mill be built. The failure of KFR to

Page: 275 build a mill was considered a serious breach of the conditions attached to the THA. It is clear that DIAND needed a private investor to implement its policy. [1045] I accept that there was a political benefit to the Government and to the Regional Office in having a private investor in Watson Lake proceed with a mill. This is evident from the communication from Mr. Ivanksi to Mr. Doughty, the special assistant for Economic Development 2010 FC 495 (CanLII) to Minister Irwin, in an email, entered as Exhibit P-79, Tab 38 and dated November 7, 1996. This email is included above but for convenience I will reproduce it again: … The best news is they are working with the local loggers and have contracted to get the Tier 1 wood to meet their needs for the first couple of years of operation. This makes our tiered system looking pretty good, and opens a market for loogers to sell domestically. Their next phase would include a pellet plant and finishing the processing locally and is a year or two away. This will cause a pressure however as they’ve already stated that the financiers will require an allocation and tenure before they will make a further substantial investment. But the timing isn’t bad. With the consultation on a new policy, tenure and allocations will no doubt be critical components. Having an operator on site, working and paying bills within a few months will certainly focus this discussion, particularly since they will promise more jobs etc but need tenure. … [1046] Moreover, there is evidence in this trial that there is a very high unemployment rate in Watson Lake. The forest industry in Yukon operates primarily out of Watson Lake. A mill that provides much needed employment would give real political and social benefits. The mill that the joint venturers constructed in Watson Lake was the largest private employer in the Territory when it closed its doors in 2000.

Page: 274<br />

political interest can be found to be analogous to a financial interest, for the purpose of determining<br />

if there was reasonable reliance. I accept that proposition.<br />

[1041] The statutory mandate set out in the DIAND Act charges that Department with economic<br />

development in Yukon . For obvious reasons, it is difficult to find that the Defendant has a “financial<br />

interest” in promoting a transaction or enterprise in respect of which the representation was made<br />

2010 FC 495 (CanLII)<br />

but in the particular circumstances of this case, it is undeniable that the Defendant had a special,<br />

particular interest in the development of the mill.<br />

[1042] The Defendant had a direct political interest in seeing the mill project proceed. The issue of<br />

forestry in Yukon may have been a small political issue for the rest of Canada, but in Yukon, and<br />

for the Department, it was an issue of utmost importance. This is clear from the record.<br />

[1043] There were petitions, protests, blockades of the Regional Office, and meetings with<br />

Ministers. The number of letters which were sent both to the Regional Office and to Ottawa also<br />

speaks to the importance of the issue to Yukoners. There are numerous other examples in the record<br />

of the politically charged nature of the forestry issue in Yukon; see for example Exhibit P-46; and<br />

Exhibit P-80, Tab 82.<br />

[1044] In addressing many of the concerns, DIAND introduced regulatory changes that required<br />

local processing. This required a local mill. There is evidence on the record in this trial that shows<br />

that it was a condition for the grant of the THA to KFR that a mill be built. The failure of KFR to

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