A First Nation in British Columbia says it was underpaid by millions of dollars in a 2002 settlement with the federal government over land that was given to a different band then sold to a railway more than a century ago.

The Lax Kw'alaams Band says in a Federal Court lawsuit that its settlement was valued at $17.75 million, while the Metlakatla Band got $150 million — more than eight times more — for the illegal sale of the same land, in a 2023 settlement.

The lawsuit filed this month says the land in northwest B.C. was illegally divided in 1888 then unlawfully sold to the Grand Trunk Pacific Railway Company in 1907.

The Lax Kw'alaams Band says the Metlakatla settlement was based on "historical wrongs" by the Canadian government that were unknown to the Lax Kw'alaams at the time of the 2002 settlement, which it now claims was "inadequate" and "unconscionable." 

The lawsuit says the federal government knew the Lax Kw'alaams had "mistakenly" valued the railroad lands at about $18.50 per hectare, when the actual value was more than $76.50 per hectare. 

The Band says the 2002 settlement should be set aside, in part because of the "inequality of bargaining power" between the federal government and the Lax Kw'alaams at the time it was negotiated.

"Lax Kw'alaams was a small First Nation with limited resources. They were recovering from decades of persecution of their culture and decimation of their people and traditional territories," the lawsuit says. 

"In contrast, Canada was a wealthy nation of more than 30 million people with vast resources, who benefited from colonialism and its associated historical wrongs against First Nations, including Lax Kw'alaams."

The lawsuit also says that "reconciliation was in its infancy" in 2002, as the country had not yet convened the Truth and Reconciliation Commission, established the Specific Claims Tribunal, nor had the United Nations Declaration on the Rights of Indigenous Peoples been adopted.