Ostensibly a dispute between federal and provincial governments over land jurisdiction, the St. Catherine's Milling case was also a landmark Canadian court ruling with regard to Aboriginal rights. The case came to the attention of the courts in 1885 when the province of Ontario challenged the right of the federal government to grant a logging license to the St. Catherine's Milling and Lumber Company. In 1889, the contentious issue was one of federal-provincial prerogatives, a contest that Ontario won.
D'Alton McCarthy argued the federal position that, under the British North America Act, only Ottawa had the right to negotiate with the Natives to extinguish Aboriginal title to the land and consequently to sell or use that land. He called upon treaty negotiator Alexander Morris as a witness to the extinguishment of Indian title.
Oliver Mowat countered by arguing for the province of Ontario that Natives had no land title rights because they were an "inferior race." The case came to trial with the North-West Rebellion in progress in Saskatchewan, and Chancellor Boyd's decision reflected his sympathies with the Canadian militia. He found for the province of Ontario because Indians were "heathens and barbarians" without title to their lands.
The case went through three appeals, and in the end the Judicial Committee of the Privy Council upheld Ontario's victory, although it disavowed Boyd's absolute rejection of Indian land title. In rendering their judgement, the Privy Council announced that Indians certainly had an Aboriginal title to the land, but that this was "a personal and usufructuary right, dependent upon the goodwill of the Sovereign." The acknowledgement of the right was consistent with the Crown's position as enunciated in the Royal Proclamation of 1763, but the limiting strictures of the phrase "dependent upon the goodwill of the Sovereign" established that right as one based on the benevolence of the government. Absolute land title was therein recognized to rest with the Crown, which could dispense it at will, in this case to the Indians. What they had been given, they could also lose at the whim of the Crown. This limited view of Aboriginal title put Native land claims at the mercy of Parliament, a body in which no Indian was represented, and denied the inherent aspect of Aboriginal title as an entity separate from Crown authority.
This definition of Aboriginal title prevailed in Canadian law until the Calder case overturned it in 1973. In the meantime, it served to obstruct recognition of valid Native claims and to facilitate the appropriation of Native lands in Canada.