The Supreme Court of Canada will hear interventions on Thursday from lawyers representing the federal government, several provinces, and a number of aboriginal organizations across the country. (Canadian Press)

Canada's highest court has heard arguments Thursday in a landmark land-claims dispute between a Yukon First Nation and the territorial government over a parcel of farmland.

The five-year-old dispute between the Yukon government and the Little Salmon Carmacks First Nation could influence future relations between governments and First Nations that have signed land claims.

"The country is going to be watching this one quite carefully," Ken Coates, dean of arts and a history professor at the University of Waterloo, told CBC News.

"This is a case that has national and potentially international implications."

Duty to consult at issue

The Yukon government is appealing two lower court rulings that say it has a duty to consult with First Nations about developments in their traditional lands.

The dispute began when the government was accused of not properly consulting the Carmacks-based First Nation before granting a 65-hectare agricultural land lease to a prospective farmer in 2004.

The lease was for land north of Carmacks, within the First Nation's traditional territory.

Yukon government lawyers have argued that the land-claim agreement it has with the First Nation details each party's obligations, meaning the courts have no right to impose further duties.

But the Yukon Supreme Court ruled in 2007 that the territorial government had not properly consulted with the Little Salmon Carmacks First Nation before granting the lease.

In 2008, the Yukon Court of Appeal agreed that the government has a duty to consult with First Nations about developments on their traditional territory.

However, it also ruled that the government did consult adequately with the First Nation on the agricultural land lease.

Finalized agreements

The Little Salmon Carmacks First Nation is one of 11 First Nations in the Yukon that have finalized land claims and self-government agreements with the federal government.

"If the [Supreme Court of Canada] decides against the Little Salmon Carmacks First Nation, it is basically saying, you know, the land claim deal is the end of it," Coates said.

"If, on the other hand, it opens it up and says, 'No, no, there's actually additional duties to consult,' then, in fact, you have a very different political situation unfold."

Yukon government lawyers were joined at the Supreme Court of Canada on Thursday by the federal government and several provincial governments.

The Little Salmon Carmacks First Nation is backed by a number of aboriginal groups across the country.

The Supreme Court justices are expected to reserve their decision following Thursday's hearing, meaning it could be several months before a ruling is made.

Regardless of what the ruling will be, Coates said the Supreme Court's decision will at least clarify the rules surrounding First Nations consultations.

"What we have been doing in Canada over the last three or four years on the duty to consult is actually making it very clear that regardless of where you are in Canada — whether there's a treaty or no treaty, a modern land claim, a historic land claim, or historic treaty — that the government has to involve aboriginal people in the resource development process," he said.

"What we're actually seeing is once you get past the question of figuring out what has to be done and who has to do what, that, in fact, relations get better."