About 100 people packed two courtrooms Thursday as lawyers for the territorial government argued their appeal of a Yukon Supreme Court decision regarding land use planning in the Peel River watershed.

John B. Laskin, of Toronto law firm Torys LLP, started off the morning by saying the appeal raises “important questions” about the land use planning process set out in the Umbrella Final Agreement (UFA), signed by Canada, the Yukon and Yukon First Nations in 1993.

The Tr’ondek Hwech’in First Nation, the First Nation of Na-Cho Nyak Dun, the Yukon Conservation Society and the Yukon chapter of the Canadian Parks and Wilderness Society sued the government in January 2014, after the government released its own land use plan for the Peel watershed.

The northern wilderness region makes up roughly 14 per cent of the territory.

As set out in the UFA, the Peel Watershed Planning Commission was established in 2004 to create a plan for how land in the region should be used.

The commission’s final recommended plan protected 80 per cent of the New Brunswick-sized swath of mountains and river valleys, and allowed for exploration and development in the remaining 20 per cent.

But the government then released its own plan, which protected only 29 per cent.

Laskin argued in court Thursday that the government has the final say over how non-settlement lands are managed.

He said the government had “fundamental concerns” with the commission’s plan.

The government had been clear throughout the process that it wanted a “balanced approach” to conservation and development.

He said the commission understood this.

“They got it,” Laskin said. “They just didn’t agree with it.”

The process outlined in the UFA allows the government to accept, reject or propose modifications to plans created by a planning commission.

In this case, the Yukon put forward five modifications to the first iteration of the commission’s recommended plan.

Two of these, Justice Ron Veale ruled after last year’s trial, were too vague to be considered by the commission.

Then the commission produced a second document: the final recommended plan.

It was after this stage that the Yukon government released its own plan, putting forward changes that hadn’t been presented to the commission before.

Three judges are hearing the appeal: Chief Justice Robert Bauman, Justice Daphne Smith and Justice Richard Goepel.

Goepel questioned Laskin about at which point a modification, especially a significant one, becomes a rejection.

The government’s plan “almost reverses the decision made by the commission,” Goepel pointed out. “At what stage does it become a rejection?”

“If indeed it was a brand-new plan (proposed by the government), it would be treated as a rejection,” Laskin replied.

The judges then discussed the ramifications of a potential finding that the government, in essence, rejected the commission’s plan under the UFA, rather than “modified” it.

This angle was new – something not discussed during the trial.

Laskin outlined the ways in which the government believes Veale erred in his decision last December.

The ruling quashed the government’s plan.

Veale ordered the planning process return to the second consultation stage, with the ability to only propose modifications related to three points it raised earlier, mainly about the importance of having a clear, simplified and streamlined plan.

Two modifications proposed earlier on, seeking greater balance between conservation and resource development, as well as options for surface access to the Peel, could not be revisited because they were too broad when they were first presented, Veale ruled.

This forces an “artificial consensus” between the two parties, Laskin said.

“(It ties) the government to a plan it doesn’t believe in and, in my submission, that is not consistent with reconciliation,” Laskin said.

Thomas Berger, one of three lawyers for the respondents, began his arguments Thursday afternoon.

He said the commission spent years working on its plans, then received two brief requests for modification from the Yukon government that lacked explanation.

The government wanted a plan that was more balanced between conservation and development, with options for road or rail access in the region.

“That’s it,” Berger said. There were no specific details or written reasons about what they wanted and why they wanted it, as there should be under the UFA.

“It was at that point that they went off on a frolic of their own,” he said, referring to the plan the government imposed in January 2014.

“They come up with a whole list of modifications the commission had never seen … That’s where Yukon went off the constitutional rails.”

Berger continued his arguments this morning.

Lawyer Jeff Langlois will also have 15 minutes to address the court. He represents the Gwich’in Tribal Council, which is an intervener in the case.

The Vuntut Gwitchin First Nation was added as a respondent earlier this year. Part of its traditional territory falls within the Peel.

The appeal is expected to wrap up today.