[Translation]
EVIDENCE
[Recorded by Electronic Apparatus]
Tuesday, April 27, 1999
• 1106
[Translation]
The Chairman (Mr. Guy St-Julien (Abitibi—Bay James—Nunavik, Lib.)): Good morning, everyone. Pursuant to Standing Order 108(2), the committee is studying the review of the administration of leases under the Indian Act.
Our witnesses from the Department of Indian and Northern Affairs are Mr. Bob Watts, Assistant Deputy Minister, Lands and Trust Services and Mr. Randy Brant, Director General, Lands and Environment Branch; from the Lands Directorate, Mr. Robert Eyahpaise, Director, Mr. Michel Blondin, Manager, Policy Planning, and Mr. Serge Larose, Manager, Policy Operations. Mr. Max Dokuchie, Policy Adviser, from the Lands Directorate, was to be here today, but he was unable to appear.
Do you have an opening statement?
[English]
Mr. Watts.
Mr. Bob Watts (Assistant Deputy Minister, Lands and Trust Services, Department of Indian and Northern Affairs): Thank you, Mr. Chair. Good morning, ladies and gentlemen.
Following a request by your committee, along with my colleagues I am here today to make a short presentation on leasing, as it is done on Indian reserves pursuant to the provisions of the Indian Act. After the presentation, along with my colleagues I will be happy to answer your questions.
I'll start with a short historical overview before giving you details of the leasing process. I'll finish with the role of first nations in the leasing process.
Mr. Eyahpaise is going to give us the historical overview.
Mr. Robert Eyahpaise (Director, Lands Directorate, Department of Indian and Northern Affairs): Thank you very much. Thank you for inviting us to the committee's table here to address the leasing issue.
[Translation]
I'm not a Francophone, but I'll try to say a few words in French if that's possible.
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Parliament has exclusive legislative authority respecting Indians and
lands reserved for the Indians under subsection 91(24) of the
Constitution Act, 1867.
Legislative responsibility for the lands of the First Nations derives from the Royal Proclamation (1763).
The Proclamation provided that no one could purchase lands from the First Nations for whom they had been reserved. It further provided that every purchase had to be made on behalf of the Crown at a public meeting from the First Nation specifically invited for this purpose by the Governor or Commander in Chief of the colony in which the lands in question were located.
The policy governing the sale and transfer of First Nations lands was to be kept up to date by the British Crown, by the governments of the colonies when they became responsible for the administration of Indian affairs and, after 1867, by the Government of Canada.
[English]
Successive federal statutes, predecessors to the present Indian Act, have all provided that reserve land could not be sold or leased except to the crown. The purpose of this surrender requirement is to place the crown between the first nations and purchasers or leasers of their land to prevent the first nations from being exploited.
The Indian Act contemplates both the sale and the leasing of reserve land. However, the sale of reserve land is strongly discouraged, because once the land is sold it is gone forever. It should be noted, however, that prior to the 1950s, it was the department's policy to encourage the sale of the land. It was thought that the sale of land would encourage first nations people to integrate into the mainstream.
The 1960s brought about a shift in policy, with an emphasis on retaining reserve land and opening it up to leasing opportunities. The Indian Act has always allowed for the possibility of leasing reserve land. As a result of this policy shift, the 1960s could be accurately described as the beginning of large-scale leasing projects.
The change in the department's position from selling the land to retaining it for leasing opportunities can be attributed to a number of factors, some of which are: the long-term economic and financial benefits for the first nations; and the realization that the land base had to be protected for future generations. Reserves that were located close to or within urban centres became very attractive for leasing opportunities. In many cases, it was perceived to be much cheaper to lease reserve lands than non-reserve lands.
Mr. Bob Watts: Just continuing on with the theme of leasing reserve land under the Indian Act, we posed a number of questions to ourselves that may assist the committee.
The first question was, what are the department's obligations when leasing reserve lands? In leasing reserve lands, the department is required to act in the best interests of the first nations people where the leasing is taking place. This requirement is necessary because a band cannot lease reserve land in their own name. The band must first surrender their interest in the land to the crown and then have the crown enter into leasing arrangements on their behalf. The relationship between first nations and the crown in land transactions such as leasing has been defined by the Supreme Court of Canada as fiduciary. In short, the crown must put the interests of first nations people before their own interests.
The next question is, why lease reserve lands? Leasing reserve lands protects the land base for future generations and provides long-term financial benefit to the reserves. Leasing allows bands and band members to enhance their economic opportunities on reserve lands. For example, long-term leases allow bands and band members to gain access to capital that would otherwise not be available under the Indian Act. Other benefits include the creation of jobs and the opportunity to create long-term businesses with outside partners who often require some measure of security.
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What is a lease? A lease is a grant of exclusive right of use and
occupation to a parcel of land for a specified period of time. There
are two general classifications of leases on reserve. The first is a
lease that is for the benefit of band members as a whole. In other
words, the revenues generated and received from the lease go to
provide additional services on reserve and save money to begin other
economic projects.
The second type of lease encompasses an individual interest in a specific parcel of land within the reserve. In other words, the individual band member may get the right to use and occupy parcels of reserve land by an allotment from the chief and council, with ministerial approval. In these circumstances, band members are deemed to have lawful possession. A band member who has lawful possession may sell his or her parcel to another band member without the consent of the band but with the approval of the minister. In addition, a band member who wishes to lease his or her land to someone from outside the reserve must ask the minister to lease the land in his or her name. A band member can never sell their lawful possession of a parcel of land to anyone outside the reserve.
Generally, there are about 38 different types of leases that are administered by the department or band councils. The majority of leases fall under three main categories. The first is agriculture. This type of lease is meant for grazing of livestock and growing of agricultural crops. However, most grazing and cash crop arrangements are now dealt with through the use of permits.
There are commercial leases. This type of lease is used when the leased property is intended for commercial or industrial ventures. Commercial activity would include use of the land for a shopping centre, manufacturing facility, restaurant, water or theme park, gas station, retail sales outlet, or mobile home park. The commercial lease may also be used for major multi-family residential projects, such as a condominium, apartment building, or subdivision development.
Then there are residential and cottage leases. These types of leases are designed to reflect the special requirements attached to leasing land for single-family use or for seasonal or year-round cottage recreation.
Other types of leases include educational purposes, railways, minerals, communications, transmission lines, and medical purposes, just to name a few.
How do you lease reserve lands? Reserve land that is leased for the benefit of a band as a whole must be specifically designated for such purposes. As an example, when a developer approaches a band with a proposal to lease reserve land for a shopping mall, this proposal would have to receive the majority consent of the band members before it could be accepted for leasing purposes. Once consented to by the members of the band, Indian Affairs officials must prepare an order in council to accept the designation of the land for leasing by the band because the approval of the governor in council is required under the Indian Act. Individual band members who have been allotted a specific parcel of land on the reserve do not have to obtain band consent to lease their parcel. However, the individual band member does need the consent of the minister to lease their parcel.
Who manages reserve lands? Reserve lands are either managed by the department or by the bands themselves. In both circumstances, they are required to carry out and apply the Indian Act. In all cases, legal title to all reserve lands is vested in the crown. Her Majesty the Queen in right of Canada must be the lessor or grantor in every lease of reserve land except that of a sublease. This includes when the crown has delegated control and management of the lands to a band council.
The band council must sign the lease on behalf of the minister who represents the crown. A sublease, by its nature, is made between the lessee and a sublessee. In this situation, the crown is not required to be on the leasing document.
What are the general requirements of a lease? In all cases, leasing activity on reserve lands requires the approval of one or more of the following: an individual first nations member, a first nations council, the first nations membership, the minister, and the governor in council. Because of these requirements, the crown has a role in transactions under the Indian Act. This means the minister or governor in council must approve all transactions and the minister must execute all leases and permits of reserve lands. Leases must comply with applicable laws, some of which are the Canadian Environmental Assessment Act, the Canadian Environmental Protection Act, the Fisheries Act, and the Federal Real Property Act.
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What are some of the specific requirements? The lease with the crown
is called a head lease when the lessee enters into subleases with
third parties. Leases are also classified by the type of activity they
cover, as I've already mentioned—agricultural, commercial,
residential, and cottage. Every lease includes a variety of
provisions, which determine the rights and obligations of the parties.
While many of these provisions contain standard terms that will be
found in every lease, other provisions will vary, depending on how the
land will be used. For example, a lease for a cottage property may
contain a clause limiting the term from May 1 to October 31 each year,
while the lease for a shopping centre will not.
Most leases contain, as a minimum, the following provisions: the crown is always the lessor, as the legal title to the reserve land under the Indian Act is in the name of the crown; a description of the land or premises being leased; rent to be paid, to whom it is paid, and when it is payable; the beginning and end dates of the lease; and permitted uses of the land. Beyond these minimum requirements, certain obligations or covenants automatically form part of the lease, unless the parties have chosen to expressly define these obligations in the document.
For the landlord, there are three obligations towards the tenant that automatically form part of the lease: the tenant's right to quiet enjoyment of the leased premises; an obligation not to derogate from the lease—for example, cannot use other property in any way that makes the leased premises less fit for the lessee; and the obligation to supply fit for habitation.
For the tenant, there are four significant covenants: to pay the rent; to preserve the state of the property, except for normal wear and tear; to allow lessor to enter and view the state of repair of the property; and to pay taxes required by law.
Finally, for the last two decades the department has transferred the management of reserve lands under the Indian Act to those first nations that have requested it. A training program is available for first nations staff and funding is allocated annually for this program.
In terms of a devolution of land management authority, devolution is the transfer of power from one party to another. The department considers any arrangement that transfers some measure of authority, power, and control from the federal government to first nations to be a form of devolution. Devolution has been an element of the federal government's policy in relation to first nations for over three decades. As a result, devolution has increased first nations expertise, provided jobs, and allows the federal government to reduce the size of the Department of Indian Affairs and other departments serving status Indians. It has rendered many program areas more effective and has increased first nations' readiness for self-government.
As part of this strategy, the department has encouraged and assisted first nations to take on greater authority and responsibility for the management and administration of community affairs, including land management. During this time, approximately 50 full-time jobs were created at the community level, which is a cornerstone for self-sufficiency. However, it is not expected that DIAND will have any significant reduction in land staff. This is because lands-related work is on the rise due to treaty land entitlement settlements, specific claims, greater commercial activity, and the complexity of leasing and land management on reserve.
Additions to reserves resulting from other things other than TLE and specific claim settlements require governor in council approval and cannot be delegated under the current devolution programs. In addition, the department offers formal training to first nations land managers in the area of land, resource, and environmental management. In addition, these land managers have access to departmental land staff for advice and assistance in their work.
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Currently there are two land administration devolution programs the
department offers to first nations. The first is the regional land
administration program, or RLAP, which authorizes first nations to
perform basic land management activities, such as negotiating and
drafting leases and other transaction documents, arranging execution
of these documents, and monitoring compliance with the terms of
leases, including compliance with environmental conditions.
The second land administration devolution program is called 53-60, which refers to sections 53 and 60 of the Indian Act. Section 53 is a vehicle whereby the minister may delegate approval authorities for land transactions on designated lands. Section 60 is a means by which the governor in council may authorize bands to manage reserve lands.
First nations, under the RLAP program, are essentially acting as agents performing functions of the department. These are performed under the general direction of departmental staff and within the terms of funding arrangements and departmental land management policies. First nations have no authority to initiate actions that are not authorized through one of these channels. It is unlikely that first nations under this program will incur any liability, and therefore the accountability issue will not be a factor.
First nations who have been delegated land management authority under sections 53 and 60 of the Indian Act must work within the authority delegated to them. The department recognizes that in exercising these powers, first nations are acting on behalf of the minister, and therefore the minister is accountable for the activities devolved to the first nations. Consequently, first nations are also accountable to the minister.
Presently there are 133 first nations, or 21.5% of first nations, participating in the two devolution programs. Fifteen first nations exercise delegated land management authority under section 53 and/or 60 of the Indian Act and 118 first nations participate in the regional land administration program.
Funding for first nations under the land management funding programs is formula-based. The formula takes into account the number of land transactions registered in the Indian land registry—for example, leases and permits. Also, 53-60 first nations are entitled to receive professional services allowances to cover the cost of lawyers and accountants, etc. This means that a first nation under RLAP is entitled to approximately 58% more funding by moving into 53-60.
These programs allow first nations to develop land management capacity in a relatively risk-free manner. Both programs are essential, as the Indian Act reduces the flexibility to create just one land management program.
Delegated decision-making authority and the band entry vote are dictated by the Indian Act and provide the essential structure for the 53-60 program.
On the other hand, DIAND regional officials are unanimous on the need to retain and build the RLAP. For most first nations, the RLAP is a stepping stone for entering into 53-60. It is anticipated that more first nations will enter the RLAP program this year, while first nations who are under the delegated authority will drop because some of these first nations are signatories to the framework agreement for the First Nations Land Management Act, which is presently being reviewed by the Senate.
All leasing documents submitted to the department are registered in the Indian lands registry. As of March 1, 1999, the land registry had 6,681 effective leases, 5,528 effective subleases, and 185 effective sub-subleases registered for all reserves in Canada.
I've attached the following statistics to my presentation notes. Appendix 1 is a summary of all leases in Canada by province and by expiry date. In appendix 2 there is a summary of all subleases in Canada by province and by expiry date. In appendix 3 there's a summary of all sub-subleases in Canada by province and expiry date. In appendix 4 there's a summary of all leases, subleases, and sub-subleases in Canada by province and by purpose. In addition, our lands policies are available in both official languages for committee members, should they desire.
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I want to thank you for this opportunity to present before the
committee. In talking with my staff, some of whom have been working
in the lands program for greater than two decades, we believe this is
the first time we've had the opportunity to talk about land management
and leasing in a very specific way before this committee. We
appreciate the opportunity and are available for any questions the
committee may have.
Thank you very much.
[Translation]
Thank you very much.
The Chairman: Thank you, Mr. Watts, gentlemen. We appreciate the fact that you have given us complete statistics for Canada. This is good work.
We will now move on to the question period. Mr. Scott.
[English]
Mr. Mike Scott (Skeena, Ref.): Thank you, Mr. Chairman.
I'm not sure who would be best to respond to this question, but can one of you describe what the legal requirements of the department are as a fiduciary...? What does that in fact mean when it comes to leasing? I see a note in the presentation here saying that the courts have actually found that the department has a fiduciary obligation, and that's a legal obligation. I'm just wondering what that in fact means.
Mr. Michel Blondin (Manager, Policy Planning, Lands Directorate, Department of Indian and Northern Affairs): That's correct. The short answer is, following the Guerin decision by the Supreme Court of Canada, the courts have defined that we have a fiduciary type of obligation, which is to use our best competencies, to have the best expertise possible, in managing Indian interests on reserves. That's the short version, if you want.
Mr. Mike Scott: Okay. The second question I have, and this again is probably more of a legal question, is this. Can leases be terminated early? In other words, is there some kind of an expropriation...? If the band determines or if circumstances arise that require the use of that property for band use or for community purposes, can leases be terminated? If so, what are the requirements in terms of notice and compensation and that kind of thing to the leaseholder?
Mr. Serge Larose (Manager, Policy Operations, Lands Directorate, Department of Indian and Northern Affairs): I don't think there have been any circumstances in which the leases... I mean, the Expropriation Act is always in place; expropriation is always there. But I don't think there have been any circumstances in the past where....
Are you talking from a first nations point of view, if the land is required by the first nation, or by an outside party?
Mr. Mike Scott: If the band council determines that they need that land for other purposes.
Mr. Serge Larose: I wouldn't think it would be appropriate, because it's a contract. The contract is entered into between the crown and the lessee, and in all probability the contract would be honoured.
Mr. Mike Scott: So you're not aware of a circumstance anywhere in these 6,000 leases where a band has determined...? Some of these leases, as you are aware, are 99 years long.
Mr. Serge Larose: Exactly.
Mr. Mike Scott: Over time the requirements or the needs of a band would change. They may determine, for example, that an area that was previously leased may be used or may be required for a water treatment plant or something of that nature.
Mr. Serge Larose: If the lease is expiring, there could be some discussions as to whether there would be a need for renewal of this lease, depending on the nature of the lease. If it's for residential purposes, for instance, or cottage leasing, it could very well be that if the lease has expired and if the actual.... The way leasing works, the land has to be designated for a certain period of time in most cases. It could be forever, but sometimes it is for a specific period of time, and when that period expires, then it's up to the band in general to decide whether they want to pursue the lease. But before the expiry of the lease, I don't think it would be a situation that would occur.
Mr. Mike Scott: When you're talking about the expiry of a lease, you're not talking about expiry of a term; you're talking about the actual expiry of the lease in total, right? Some leases have a 99-year lifespan but are renewable at various stages along the way. So you're talking about the expiry of the lease in total. It's not just that it's up for renewal; it's actually expiring.
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Mr. Serge Larose: Well, we'd have to look at the actual wording of the.... As you know, some leases were put together 40 years ago. Each and every lease has to be looked at on an individual basis, on a case-by-case basis, to find out exactly what the legal obligations are.
Mr. Mike Scott: My understanding of a lease is that once the term of the lease is over, the full term, there is no further legal obligation on the part of the lessor, whether that's the department or the department through the band council. There is no further obligation. The individual or individuals or company that might have held that lease no longer have any interest in that lease or in any improvements that might have been put on the property. Isn't that the case?
Mr. Serge Larose: Exactly.
Mr. Mike Scott: So I guess what I'm saying is that during the term of the lease—not at the end of it but during the term—there must be circumstances that arise where the band, in determining what's in the best interest of the band, would find better use for a piece of property, or maybe a requirement for a water treatment plant, a water system, roads, etc., as communities develop. Has that circumstance not arisen while people are actually still leaseholders, where there has been a requirement to ask people to move simply because they need the land for other purposes?
Mr. Serge Larose: It could very well happen, but, as I said, you would have to negotiate. That lease is a contract. The band surely has no expropriation powers. That's what you're looking at, to cancel a lease and go that route.
If the land is required for the general welfare of the band for other purposes, and if the land has been designated by the whole community for a specific purpose, which is leasing, for a specific period of time—that is usually what happens—that land is usually used for that purpose for the whole period of time.
Mr. Mike Scott: Just one more very short question. I'm assuming that the 6,681 leases you have in your appendices are head leases.
Mr. Serge Larose: Well, they could be direct leases or head leases. A head lease is when you have subleases, naturally—that's why we call them head leases—usually given to a band corporation, for instance, who in turn would sublease to other parties.
Mr. Mike Scott: So the subleases that you noted on the second page may in fact relate to these prime leases as well.
Mr. Serge Larose: Exactly.
Mr. Mike Scott: Or they may not.
Mr. Serge Larose: That's the way I see it.
Mr. Robert Eyahpaise: We have leases and sub-subleases as well—all three categories.
Mr. Mike Scott: Thank you, Mr. Chairman.
The Chairman: Mr. Finlay.
Mr. John Finlay (Oxford, Lib.): Mr. Chairman, I want to go right back to the beginning for a minute. On page 3 it says:
Does that go all the way to 1763 or 1867? When did that become department policy? You tell me when it ended, in the 1950s, but you don't tell me when it started.
On the next page it says:
How did that perception come about? Was the department lax in what they charged? Were they friendly deals? Or was it just that we always gave the aboriginals the cheapest land or the poorest land?
Mr. Bob Watts: In terms of the policies that were in place up until the fifties, some of it was very historical in nature and some of it was an extension of the treaty process, which looked at the alienation of first nations land from first nations control. Some of it came from the view that it would be easier and more profitable for first nations to be selling land and perhaps less cumbersome for all involved. Also, I think it mirrored some of the efforts that were going on in the United States pursuant to the Dawes Act, where first nations land was being alienated from the tribes down there by way of sale rather than by way of lease. It was more a sign of the times, I guess.
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With respect to the question on whether or not it was cheaper in
terms of leasing reserve land rather than non-reserve land, I think
some of that goes to where some of the first nations land is situated.
Some of the reserves aren't in prime developmental parts of the
country, so in fact by comparison it would be cheaper to lease those
lands.
It was also a question of development on reserve. The price in terms of lease, which may well go to the type of activity that would take place on that land, I think would also fall into the general category of how much development has happened there. In some places there had been very little commercial or industrial development. So it was really opening up some of those reserves for development or for cottage use. Because infrastructure wasn't in place there that might have been in place in other areas, it was deemed to be somewhat cheaper to be leasing those lands rather than lands in more developed circumstances.
Mr. John Finlay: A supplementary, Mr. Chairman, just for a moment.
You mentioned the American experience when I asked about encouraging the sale of the land, but just ahead of that it says:
Was that attitude in place during the 1800s? Did it gradually modify with development and so on, until we get to the present? Or am I misunderstanding what you're saying?
Mr. Robert Eyahpaise: Mr. Finlay, in terms of our information, when we started noting this sort of activity taking place, it was really from the 1870s until the 1950s. That's the period we're talking about more specifically. There was really no wholesale policy per se that could record the transaction that took place. However, in our registry we were able to record whenever certain pieces of land were lost from the reserve base and sold to non-aboriginal people.
So it was really looking at it from a statistical analysis point of view of saying there was an encouragement there, but I think the underlying policy was to try to integrate first nations community members outside of that, and this allowed for such a policy to take place. But there was really no one set policy that we could look at. It was more of a statistical analysis between that period, from the 1870s to the 1950s, where we saw transactions taking place at the exterior of the reserve.
Mr. John Finlay: Thank you.
[Translation]
The Chairman: Thank you.
Mr. Bachand.
Mr. Claude Bachand (Saint-Jean, BQ): I would like to thank our guests for the excellent presentation they've just given. They say they're appearing before the committee for the first time, but it probably won't be the last because there are an increasing number of problems related to the possession of lands. I myself would be very interested in having all of your business cards after the meeting because we are receiving increasing numbers of telephone calls and we hear about a lot of concerns on this issue.
I would like to restate what I understood to be the logic of your presentation. Do we agree that Her Majesty must be the lessor because she holds legal title to all the reserve lands in Canada?
Mr. Serge Larose: That's absolutely correct.
Mr. Claude Bachand: I would like you to explain one thing to us. We passed a bill in the House not long ago on the management of Aboriginal lands for the 14 First Nations in Quebec, which were exempt from the Indian Act as regards lands management. I imagine Her Majesty still holds legal title. How can there be a change? Doesn't that ultimately mean, quite simply, that the 14 First Nations will no longer need to refer to the Minister of the Governor in Council and that they will now be free to manage the reserve lands on which they live, but that Her Majesty will nevertheless retain legal title?
Mr. Michel Blondin: I can explain this situation.
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The new act will replace all the sections of the Indian Act
concerning the management of lands and resources with a new regime
whose framework is set out in the Act, but which will be contained in
the code of each First Nation. It is this code that will govern the
management of lands and resources on a day-to-day basis as regards
leases, the interests of each individual and so on.
Mr. Claude Bachand: Without changing legal title, which is still held by Her Majesty?
Mr. Michel Blondin: I'm not a lawyer so I can't exactly answer your question, but I can tell you that these lands remain reserve lands. However, under the Act, the First Nation is considered the owner of the lands and acts accordingly. It therefore leases and administers the interests of the members of the First Nation.
Mr. Claude Bachand: Mr. Chairman, I would like to have a few more details on this, perhaps a legal opinion, because the type of possession appears to me to be a very important point. If Her Majesty no longer holds legal title, that means that these 14 First Nations could do exactly what they wanted and would become virtually sovereign over their lands. I would like to know the details of this matter.
You also mention in a number of places—and I agree on this—that the Minister and the Governor in Council can delegate their powers. They can't do this?
Mr. Serge Larose: When you talk about delegation of powers, you have to look at sections 53 and 60. Section 60 of the Indian Act provides for a delegation of powers in matters of general administration, whereas section 53 concerns the administration of surrendered and designated lands within the reserve, to be leased, usually, or to be sold.
Mr. Claude Bachand: Okay.
Mr. Serge Larose: Most electors in the community vote to allow a parcel of land to be identified for rental purposes, and the Governor in Council must then accept that designation. It's as simple as that.
Mr. Claude Bachand: I'm going to stop beating about the bush and tell you my major concern in this matter, and that is the situation of the Musqueam reserve in British Columbia. I'm going to ask the officials here present to make a presentation on this subject. I know this won't happen today because you may have been expecting something else, but I feel there is a major problem there. I believe you are aware of the problem. Can you tell me what type of rental that was and what type of lease was signed for the property tax of certain properties to increase nearly 2,000 percent?
If the Minister delegates his power, can he also withdraw it where there have been abuses? I'm not saying that the Indians committed any abuses, but the problem at Musqueam is specific and I would like to clarify it all from A to Z. I would like to know the type of lease and their term, as well as the reasons for such increases. Can the Department let 2,000 percent increases occur without doing anything? If you tell me you can't intervene or, on the contrary, that the Department can play a role in controlling increases of this type, I would like to know the reasons why.
I don't know whether you can answer my question this morning or whether it would be preferable to ask you to make an additional presentation solely on the Musqueam reserve.
[English]
Mr. Bob Watts: I can start to answer that question. First of all, maybe we'll just go back to one of your earlier questions. In fact, through Bill C-49, the First Nations Land Management Act, title to the land will still be vested in Her Majesty. It will still be Indian Act land.
As was noted earlier, the portions of the Indian Act that talk about the management of Indian lands...the first nations will be taken out of that portion of the Indian Act. Their land codes will speak to how the lands will be managed, but the title will still rest with Her Majesty in right of Canada.
With respect to Musqueam, my understanding—and some of these matters are before the courts, so we'll necessarily be guarded in how we approach this—is that what we're dealing with there is a 99-year lease, and it's just gone past its 30th anniversary. The lease itself called for a rent review at the 30-year period. Reviews were undertaken, based on value of surrounding lands and other leases in that area. There was some disagreement with respect to what the lease amount should be. It ended up going to court, and the courts have made some rulings with respect to what the appropriate lease amount should be, and that amount is presently under appeal.
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So the courts have said what the lease amount should be, what the
increase should be. I should note that that's consistent with similar
land values and things that have happened on other federal lands—for
example, long-term leases in national parks, when those leases came
due after a 30-year period, where there have been no rent reviews
during that period of time. So it would go from a factor of 30 years
ago to the present, and land values have increased during that time.
I should also note that given our duty to act as a fiduciary...I mean, it's hard to say exactly what we would have done, but we would certainly have wanted to have appraisers and people qualified in terms of land values to help us determine what the value of those leases should be, and it may have gone to court. We would have had a duty to act for the benefit of the first nation and to ensure that the land is being used for its fullest and best use. That refers back, as Mr. Blondin talked about, to the Guerin case, which gave a clear statement in terms of our fiduciary duty.
The Chairman: Merci M. Bachand.
Mr. Nault.
Mr. Robert D. Nault (Kenora—Rainy River, Lib.): I just want to follow up on Claude's questions.
I understand under the Indian Act there's a fiduciary responsibility of the department, but tell us the difference between this and myself as a landowner who decides to enter into a commercial contract, whether it's a lease for 99 years or for 25 years, with a clause or two that says I have the opportunity to go into the contract to review what I charge. There seems to be a perception by some that these are significantly different from any commercial venture that I as an individual non-native would enter into with my own land, with people who want to lease my property. I happen to own some property of my own, and this doesn't strike me as much different.
So I'd like you to give me a sense of whether there is a difference between—and let's use the Musqueam lease as part of it. What's the difference between that and if somebody decides to lease a bunch of cottage land that they privately own and have a 99-year lease and build into it a number of clauses? Tell me what the difference is. That's one issue.
The second issue is this. There's another perception floating around here that somehow people have the ability to expropriate and to get out from underneath these contracts if in fact the band so wishes or.... I know there is only one way you can do this, and that's if the crown itself decides it's going to expropriate for particular reasons, and they don't do that very often. When they have, of course, we all know what kind of trouble that has caused in the past.
Could you put it in the context of a regular commercial contract off reserve? I think it's important for the committee to get a sense of that.
Mr. Serge Larose: I don't think there is any real difference between...a lease is a lease. The lease is drafted. Our legal services get involved with the drafting of our leases. The lease is between Her Majesty and another party, and the clauses are drafted, as I said, by legal services and accepted by them. They are the same clauses outside the reserve.
The obligation we have—you talk about a fiduciary obligation—flows from the department, as it says there. The minister has the responsibility to put the first nations interests first.
Usually in every lease the process for rent review is directly in the lease itself. It was negotiated and agreed to by all parties right at the beginning. In this particular case, you're talking about Musqueam, where we have a 30-year period with no renewal, the same rent basically. All of a sudden, you have, after 30 years—and we all know what happened around the Vancouver area, and it happened ten years ago in the Toronto area. There was a tremendous increase in land value. This reserve is situated within the perimeter of Vancouver. Therefore, we all understand that the land value has gone up tremendously, and that's exactly what is happening.
• 1155
As the federal government we have an obligation to go out there and
find out exactly what the value of this land is, and that's exactly
what has been done. In this particular case, the band has—we're
talking about delegation of authority—the delegation of authority
from the minister to do exactly this. It has been delegated to them.
The band has actually gone and got the land appraised by expert,
qualified appraisers and has come back with a value depending on the
parcel of land, as you all know, which has increased tremendously.
The band has an obligation to their members to go back and get a
decent return on that land value.
So we are stuck with 5.94% return, which is about approximately 6% of the land value. If the wording of the lease...originally, I think that particular one mentioned, as I recall, a 10% return. I'm not sure; I will have to check that. It was approximately a 10% return on the value of the land, and we all know what the value of the land is. Therefore, we are stuck with this—stuck is a big word. We have an obligation, and the band has an obligation to their members, to get that kind of return for their people.
Mr. Robert Nault: Let's go back then to the fiduciary responsibility under the Indian Act. Let's tie it to that. What does that mean in practical terms for the department? There seems to be another perception floating around here that the minister or the crown should intervene in this particular lease. Heaven knows, if that's the start of it they could intervene in the other 6,681 of them. My point is, how would the fiduciary responsibility affect the ability of the minister to move in and, for the sake of argument, make the non-natives who entered into a 99-year lease happy? Because they didn't read their lease when they signed it, now they seem to think they're hard done by when they have entered into a commercial arrangement.
I need to get a sense from your perspective, or if we don't have the legal capacity to do that today, we'll get someone from the department or from Justice who can, of how exactly that would work. Can you as a department, because of your fiduciary responsibility, go in there and in essence reduce the value of the return to the first nations, to please people who are not happy, who went to court, and the courts are involved, as I understand? Can you do that, or should you do that, I suppose, under your fiduciary responsibility?
Mr. Bob Watts: The role we've offered is to try to identify a party to help bring the parties together to find a solution acceptable to both the first nation and the tenants.
In terms of your question specifically, if we went in and said “Well, first nation, we think you should accept a much lower amount”, my sense is we would be sued for the difference.
Mr. Robert Nault: The last question I have is the one that deals with leasing agreements that expire. I recall one in particular when I was first elected. Treaty No. 3 First Nation had a cottage leasing agreement with a number of non-natives. They decided at the end of the agreement that they no longer wanted to pursue that particular area and told the folks “That's the end of it. We're going to use this for other purposes. You have to leave now.” As I understand it, that would be the same thing we're talking about here after the 99-year lease. When they signed the agreement, I'm under the impression that when they built houses worth half a million or more, those folks must have been aware that the owners of the land may decide at the end of the lease that they might want to build condominiums instead and double their return on their investment. So therefore this is a commercial agreement like any other.
Would that be the correct case? There's no particular difference between this commercial arrangement with these folks than any other commercial arrangement you'd see across the country. Once your lease is terminated, and if there are no abilities for renewal, the owner of the land can decide exactly what he wants to do. In this case the owner of the land is the band. Is that a fair assessment of how it works?
• 1200
Mr. Bob Watts: My sense would be that when a lease has a particular expiry date, one shouldn't presuppose that it will go past that, unless another arrangement has been made.
Mr. Robert Nault: What I'm trying to get out of the witnesses, Mr. Chairman, is this. That's not unusual; it is in any other agreement. I'm aware of it happening in other parts of the country, but there seems to be a sense here by some that this is somehow unique; it's never happened before.
Could you tell us how often this happened? Could you give us, say in the last ten years, leases that have expired and were not renewed and the band decided to go a different route? Would there be some examples of that that we could have in front of us, just to show that this is not somewhat unique?
Mr. Robert Eyahpaise: Actually, there are none really that we could.... We've done a thorough analysis of all the leases across the country and we have not come across that situation. In light of our fiduciary obligation, what we're trying to encourage is really good business practices. That's what first nations in fact are doing.
Mr. Robert Nault: Let me give you an example of one that did occur. On Rat Portage Reserve just a little over ten years ago there was a major piece of property that belonged to that first nation. It was all leased—a significant amount was leased—to cottage lots. That reverted back.
In Fort Frances, in a community called Couchiching, they had a major golf course there that was leased out to the community. The first nation took it back.
So I guess I differ with your view that it doesn't exist because I've seen a number of them in my own backyard. Am I unique in that? Are these different kinds of leases? On the one hand, you have a nine-hole golf course that has reverted back to a field. It's a commercial property. That must have been leased out in some form.
Mr. Robert Eyahpaise: Sorry, I just need some clarification on that. This is prior to the expiration of the lease or the designation?
Mr. Robert Nault: No, at the end of the lease.
Mr. Robert Eyahpaise: At the end of the lease?
Mr. Robert Nault: Once the lease expires, it just isn't renewed. There must be a number of those, because you've got thousands here. It's commercial property. The value of it changes. The interests of it for the community obviously will change over time. So you can't tell me this has never happened before. I'm shocked to hear you say that.
Mr. Robert Eyahpaise: I probably misunderstood your statement. You're talking about where they don't renew the lease or anything like that.
Mr. Robert Nault: Yes, I'm saying that after the 99-year lease, if I were those people in Vancouver, that band, I would not renew that lease as a business person.
Mr. Robert Eyahpaise: No, you're right—
Mr. Robert Nault: I would look at that and say I can make a heck of a lot more money for my community and for my people. I would not renew that. I'd build a heck of a lot of condos, if things were the way they are today. I'm just talking from a business perspective. There must be a number of those—
Mr. Robert Eyahpaise: I misheard your question.
Mr. Robert Nault: Could you give us some examples of a very similar thing, just for the committee to get an understanding?
Mr. Robert Eyahpaise: Yes. We're just getting some examples of that. We don't have a full analysis in terms of how many times it has occurred, but it has occurred. I misheard your question. Excuse me.
[Translation]
The Chairman: Thank you, Mr. Nault.
Mr. Scott.
[English]
Mr. Mike Scott: Thank you. I have a couple of questions on the Musqueam situation. Then I'd like to ask some questions on taxation.
In 1965 the department signed a head lease with the prime leaseholder on the Musqueam Reserve. The prime leaseholder in turn signed subleases with I think the 72 or 74 homeowners, who, over a period of five or six years, moved onto the reserve, entered into leases, and built homes.
In 1980, as I understand it, the minister of the day signed a delegation of authority under section 53 of the Indian Act, transferring authority for the management of those leases, or the head lease and the subleases, as a consequence, to the band and council. I'm told by the residents that no notice of this delegation was ever given to the residents. Is it standard that when the minister makes a delegation of authority under section 53 the people who would be affected by that would receive some kind of notice?
Mr. Robert Eyahpaise: There has really been no policy per say to advise the transfer of this authority. That hasn't been the practice of the department in the past. I don't believe it was in this case either at the time. There's no legal requirement in the Indian Act to have such a policy in place either. So I guess it would go towards best business practices. But up until this time, no, there hasn't been a policy on it.
• 1205
Mr. Mike Scott: I'm told by people who are homeowners and leaseholders that no notice was ever sent by the department advising leaseholders of that fact. So they've been under the impression, until 1993, I think, that they were actually dealing with the Minister of Indian Affairs, effectively.
Mr. Serge Larose: The lease is still between Her Majesty and....
Mr. Mike Scott: But effectively, because there's been a delegation of authority.... It may be on paper that way, but the reality is that the people who own those homes and are leaseholders are not dealing any more with the Minister of Indian Affairs; they're dealing with the band. And they were unaware of that from 1980 through to 1993.
Is there not some wording in the lease agreement with respect to renewal that talks about fair rent?
Mr. Serge Larose: We always have an obligation to get fair market rent, and that's exactly what we're doing at this point.
Mr. Mike Scott: In your look at this, there are other properties that are leased that are bringing in that kind of revenue in Vancouver. I'm talking about residential properties where people are leasing land and paying between $28,000 and $38,000 a year for the lease of the land. Can you give us any examples of that?
Mr. Serge Larose: No. The only example I can give you is that what we're going by at this point is the decision of the court as to.... Actually the court touched the actual value of the land, the appraised value of the land; that is to say the fair return on this property.
Mr. Mike Scott: There's another piece of property immediately adjacent to this at Salish Park. Can you tell us what the average lease would be on that?
Mr. Serge Larose: Are you talking about the property on reserve?
Mr. Mike Scott: Yes.
Mr. Serge Larose: That was a one-shot deal, if I recall.
Mr. Mike Scott: Yes. But just for comparative purposes, what would the...? They must have gotten a fair lease for that. What would that be running at?
Mr. Bob Watts: I'm not really sure what the lease rate is for that. We can investigate that and provide that information to you. One of the extenuating circumstances is when the land was valued. That has to be taken into account.
Mr. Robert Eyahpaise: I was trying to think of some of our regional counterparts. Salish Park was where there was a prepaid leasing arrangement. That was made in 1972. That's really the closest adjacent property that we can make a comparison to.
Mr. Mike Scott: Right.
Just so we can keep moving, if you could come back to that when you have the information.... I have a couple of other questions.
In 1991, I understand the minister also entered into an agreement with the band for the purposes of taxation. My understanding, in that situation in 1965 when the head lease was signed, is that the property taxes were to be collected by the City of Vancouver, and the City of Vancouver was to supply the services to the residents in that development.
If I get out of line anywhere, just jump up and tell me I'm wrong, but this is my understanding.
My understanding is that in 1991 the Minister of Indian Affairs, in conjunction with the band and in conjunction with the City of Vancouver, signed an agreement that allowed the band to start collecting property taxes. The band then entered into a side agreement with the City of Vancouver. They paid the City of Vancouver on a block sum basis, I believe, or some such arrangement, and the City of Vancouver continued therefore to receive the funding for the services. They continued to provide the services, but the band in effect was now the tax collector.
My understanding is that since 1991 the property taxes have been increased two to three times by the band and yet the services the City of Vancouver have been providing and the costs for that have not increased anywhere near that.
Furthermore, the band is actually, on a comparative basis, if you take a house in an adjacent neighbourhood paying comparable tax rates, in effect, although it doesn't say it in the taxation notice, collecting a proportion of their taxation revenue, which would have been, in a non-reserve or off-reserve house, for school taxes. The band is in fact collecting that but is not submitting revenue to either the provincial government or paying for any school services that those residents might expect for the money they're putting out. As near as I can see, what has happened is the band is using property taxation as a means of raising cash but not providing services. There are no services tied to the taxation that is being collected on that reserve, which is completely unusual, because in every other community in Canada, when property taxes are collected, there is a service provided for that, and your property taxes are tied to the services that are provided. In effect, because of this taxation agreement that was signed in 1991, that's not the case.
• 1210
Mr. Bob Watts: Thank you for the question. I think we're going to have a bit of a problem answering your question in full. I brought with me folks who are experts in leasing, not experts in taxation. However, if the committee wishes, we could respond in writing to your question or come back before you with some folks who are experts in taxation.
I will say that it is my understanding that when the first nation was delegated taxation authority, they exercised it in the same manner the City of Vancouver had exercised it in the past, based on the same evaluations.
I'm aware of some work that has been done that has compared the taxation rate on reserve with that off reserve and also looked at services. We're prepared, as I said, either in writing or in appearing before the committee again, to talk about those things. Unfortunately, or fortunately as the case may be, I have folks here who are experts in leasing and prepared to answer those questions on leasing as requested.
The Chairman: Last question.
Mr. Mike Scott: I appreciate the answer, and I appreciate that you didn't come here today prepared to talk about taxation issues, but the two issues really are interlinked. Of course, the Musqueam residents, the leaseholders, are telling us that the taxation issue, coupled with the lease payment issue, puts some of the leaseholders in a position where they're not just paying the $38,000 a year for lease payment, but on top of that they're paying another $7,000 to $8,000 in property taxes, which puts them in a $44,000-a-year, plus or minus, position. That is something they simply cannot afford.
Again, it comes back to the wording in the lease. I do believe in the lease there is some wording that the lease rates, when they were to be renegotiated, would be fair lease rates. In other words, you would expect that both parties would come to the understanding that whatever was renegotiated or accepted would have to be fair to both sides, both parties. Usually that's the way you look at any kind of a contractual arrangement. Clearly, the residents in this case are saying they can't afford to pay those kinds of rates. And clearly what they're saying is that most of them will lose their investment. As a matter of fact, their investments are probably worth zero at the present time because of the controversy and because of the demand for this very high lease rate.
Essentially what you're saying to the committee here today is that the department is not either prepared or in a position to get involved and to try to address that situation in any way at the present time.
Mr. Robert Nault: Mr. Chairman, on a point of clarification, I think it's important for us to know that this particular issue has been appealed. If it's before the courts, it's very difficult for the department to start giving opinions based on that, and I think Mr. Scott knows that. It's not that someone doesn't want to talk about it. I think that's the main reason why we decided to deal with this in a broader context. If this court case were over, I can assure Mr. Scott that we'd be talking specifically about that issue, at the same time using this as information to go on.
• 1215
As you know, Mr. Chairman, it's always very difficult for officials
to talk about things that are in front of the courts, and I don't
think it's appropriate for us to ask the department to give us their
opinion on the tax issue when in fact it's before the courts. Once
that's done, then we could probably revisit it and ask them for that
very information. I don't think it's fair to do that at this point.
The Chairman: Last question, Mr. Scott.
Mr. Mike Scott: I understand where Mr. Nault is coming from. When the committee decided to examine this issue, we decided to examine it from a broader context, but we also said that in the course of doing that we were going to try to get to the issues surrounding the Musqueam situation, because that's the issue that has brought this subject to this committee, frankly. That's why we're discussing it.
Really, what I thought the committee was going to be doing was trying to come up with at least some kind of recommendation that may provide the minister, the department, the Musqueam residents, and the Musqueam Band a way out of the current dilemma without prejudicing what might be taking place within the courts. I thought that was the reason we went to this broader context. But I still think if the committee can find some recommendations that are satisfactory to the parties, the committee ought to be examining those. I think in order to come to a position of even having a discussion on that, we have to understand all the facts. It's not just a matter of lease rates; it's a matter of taxation and it's a matter of what is fair and what isn't fair in terms of what people can afford to pay.
The Chairman: Mr. Nault.
Mr. Robert Nault: Just to be clear here, what we decided we would study is the whole issue of lease arrangements across the country. That's under one section of the act. The whole issue of tax authority is under another section of the act. Mr. Scott never once brought up the fact that he wanted to talk about how taxation authority is dealt with under the act.
Now, in front of the committee we have terms of reference of what we wanted to look at, and you've sort of changed the yardstick a little bit here and broadened our scope. There was never any intention to do that. If you want to look at taxation and how it applies under the Indian Act to bands and the fiduciary responsibility of the crown, let's talk about doing that, but that's not what we agreed to do. They are two very different subject matters and they're looked at in different sections of the act.
I'm a little surprised that all of a sudden we're getting into this, because that's not what we're looking at. Tax is a very large subject matter. I'm not suggesting we shouldn't do it. I just don't think we can do it all mingled together. I think we should stick to the issue we agreed to study, which is leasing.
[Translation]
The Chairman: Thank you. Mr. Scott, a very brief question.
[English]
Mr. Mike Scott: Yes, very quick. I would just suggest that if Mr. Nault did go back to the minutes of the meeting.... I specifically mentioned taxation as well as leases, and I suggested that the problem at Musqueam was a combination of events, not just one single event.
I would also suggest that the motion I brought to the committee was for the examination of leases, feeling that we would have an opportunity to look at that issue at the same time, because they are really intertwined.
I'm quite prepared, with the agreement of the committee, to have people who are experts in taxation come before the committee and talk about that issue as well, because I think we need to understand the issue in its totality, not just the one aspect of it.
The Chairman: Thank you, Mr. Scott.
Mrs. Barnes.
Mrs. Sue Barnes (London West, Lib.): It will be my first meeting and I'm going to stick to the agenda and ask you questions relating to the subject matter. If my colleagues know the answers, I hope they'll forgive me, but I do want to gain an understanding of what you're here to talk about.
First of all, let's talk about some of the things that can be different and some of the things that can be the same if you're a non-native and a native under this act. First of all, is there an exemption from the planning act if you're dealing with leases?
Mr. Serge Larose: The planning act?
• 1220
Mrs. Sue Barnes: Any planning act. Usually the federal government has exemptions under the planning act. Under this act, do you still have exemptions because you're dealing on behalf of the crown?
Mr. Serge Larose: I will have to get back to you on this one.
Mr. Bob Watts: My sense would be, though, that any provincial law that went to land specifically wouldn't be applicable on reserve because it's federal land.
Mrs. Sue Barnes: My feeling is that you don't have to comply with the planning acts.
Mr. Serge Larose: Are you talking about zoning, by any chance?
Mrs. Sue Barnes: No zoning is municipal. Let's get the planning act answer, first of all.
Mr. Robert Eyahpaise: No the planning acts would be very provincial-specific.
Mrs. Sue Barnes: Yes.
Mr. Robert Eyahpaise: In this case they would not necessarily apply to federal territories.
Mrs. Sue Barnes: Thank you. That's the answer I needed.
At the municipal level, mainly for leasing and any land development, they're mainly related to zoning requirements. Under your development of land, under leaseholds on reserve, would you have to comply exactly in the same manner with the zoning requirements?
Mr. Serge Larose: What usually happens is that as much as possible there is some goodwill between the two levels of government. That's basically the way it works. The municipal bylaws, the zoning bylaws, would not apply on reserve land. However, as much as possible there are some arrangements that are being reached.
Mrs. Sue Barnes: Okay. You listed four acts that do apply that leases must comply with. There are hundreds of acts affecting land use in provinces, most of which I think you would be impacted by. Let's just start with a few of them.
First of all, obviously all of your leases are under normal contract law for every jurisdiction, so there's an opportunity, I would think, then, to do options to lease, options of renewal. Is there anything restricting any party that wishes to entertain a lease from entering into these agreements?
Mr. Serge Larose: Are you talking about the original lease or are you talking about a renewal?
Mrs. Sue Barnes: If I can create a lease with the land I own downtown, what's the difference? Do I not have all the options of normal contract law available to me?
Mr. Serge Larose: Are you talking about an individual Indian who owns land on reserve, or are you talking about a band?
Mrs. Sue Barnes: It doesn't matter.
Mr. Serge Larose: It's different.
Mrs. Sue Barnes: Okay, let's talk about a band, first of all. Do I have an option to create an option to lease?
Mr. Serge Larose: As I mentioned, before the band can actually lease land, it has to get the approval of its community to identify the parcel of land.
Mrs. Sue Barnes: I understand that.
Mr. Serge Larose: Sometimes there's an attached lease when they have somebody contemplated for the leasing, or land is identified for general leasing purposes.
Mrs. Sue Barnes: Okay. I think you're reading more into my question than what's really there. All I want to know is whether, as somebody dealing with either a band or an individual lease, once you have your authority to act, I have the full rights of negotiation under contract law that anybody else not dealing with another situation would have. Could I create an option of renewal in my lease?
Mr. Serge Larose: Well, it's negotiated.
Mr. Robert Eyahpaise: I think you would have those types of options. The restrictions would go towards consideration for what authority you have from your community in terms of—
Mrs. Sue Barnes: I have my authority. You have the authority on both sides. Can I contract anything I want?
Mr. Robert Eyahpaise: Probably within reasonable grounds you could assume that normal contract law would apply. The only restriction would go towards things like alienation of the property itself. If you have that in place, I think any reasonable type of contract law or lease would apply.
Mrs. Sue Barnes: To my knowledge, you would not be able to break any contract laws then. You would have freedom to contract. That would include a whole range of options. So it's a matter of negotiation.
Mr. Robert Eyahpaise: That's correct.
Mrs. Sue Barnes: Okay, fair statement.
I would also state to you that as normal fiduciary duty there would be an obligation to get fair market value. And I would also put to you that any contract can be created by good business people that helps and is designed to meet their mutual needs.
Mr. Serge Larose: That's correct.
Mrs. Sue Barnes: This is no different from regular society working in contract law.
Let's talk about easements for a while. Easements are supplies of services. Is there anything in your current legislation that would restrict you from providing services in the creation of easements?
Mr. Serge Larose: We issue easements.
Mrs. Sue Barnes: All the time?
Mr. Serge Larose: Yes.
Mrs. Sue Barnes: Is there anything that would restrict you in severing land?
• 1225
Mr. Serge Larose: Severing land in terms of selling land?
Mrs. Sue Barnes: Severing land as in parcelling it.
Mr. Serge Larose: No, that's always at the wish of the band council, basically.
Mrs. Sue Barnes: That's what I needed to know.
Let's talk about environmental audits for a little while. Obviously, lands across Canada have some hazards. At what point in time could a band request or a lessor or lessee request an environmental audit? Just go over that process. Could that be a precondition of a contract?
Mr. Michel Blondin: It depends on the contracts. In the old ones you have less stringent clauses. In the current ones, basically lessees have to follow all current environmental legislation. That means the lessor can go in almost any time he suspects something to see what's going on.
Mrs. Sue Barnes: But say a band has land and they have no knowledge of what's there. They don't know if there are hidden oil tanks underground. They don't know if there are shells from a former army underground. Can they, as a right, ask to have an environmental audit done before they put land up for lease? And who would pay?
Mr. Serge Larose: Usually it would be the lessee, the developer, or whatever you call him.
Mrs. Sue Barnes: He doesn't have the right.
Mr. Serge Larose: Not yet, but he wants to know what's there.
Mrs. Sue Barnes: Yes, so who's going to pay for the environmental audit?
Mr. Serge Larose: As much as possible we would try to give the bill to the developer.
The Chairman: Last question.
Mrs. Sue Barnes: I'm going to leave it there for now. Thanks.
[Translation]
The Chairman: Thank you, Mrs. Barnes.
Mr. Bachand, then Mr. Finlay.
Mr. Claude Bachand: Mr. Chairman, all I want today is to ensure that the situation of the Musqueam reserve does not derail the entire treaty process in British Columbia. If we don't get to the bottom of the problem, there is a risk that the process concerning treaties in British Columbia and the Nisga'a treaty will be derailed.
In my opinion, you have to look at the price paid to lease the lands and for property taxes. It seems to me very difficult to detach taxation from land leasing.
I've often denounced the lack of action by politicians. The courts must often take over because federal policies are not clear enough. I'm quite reluctant when I hear that a case is before the courts and we can't talk about it anymore or do anything.
I believe I heard that a mediation committee had been established to try to bring the two parties together, and yet the case is before the courts. When a case reaches that stage, there are attempts at bringing the parties together to reach an out-of- court settlements.
My intention is to try to solve the Musqueam problem. If it is not solved, any opposition member can take a plane and go there and stir up trouble; to each his own prerogatives. We're trying to get to the heart of the matter.
I'll come back to the people before us, who are not specialists in taxation, but rather in the leasing of lands on Indian reserves. Did I correctly understand that, when the Minister delegates his authority, he cannot take it back?
Mr. Serge Larose: That's false. Subsection 60(1) of the Indian Act provides that the Minister may, in cases of abuse or similar matters,...
Mr. Claude Bachand: Withdraw his authority.
Mr. Serge Larose: ...withdraw the authority. As for section 53, I would have to check to be more certain. It's possible under section 60.
Mr. Claude Bachand: This is a very important notion. In such instances, it must be shown that there has been an abuse. What one must do is convince the Minister that there has been an abuse.
Mr. Serge Larose: We'd have to read the Indian Act. I don't have it in front of me.
Mr. Claude Bachand: All right, perfect.
As for leases, when the Minister decides to delegate his power, is there a departmental policy on how a lease can be terminated?
• 1230
In everyday life, if I rent an apartment where the landlord has done
no maintenance or repaired the leaky roof or a wall has fallen down, I
have administrative remedies that enable me to terminate the lease. Is
the Department concerned with putting this type of clause in all
leases—there are 6,000 of them—to indicate to the band council that,
if it goes beyond such and such a limit, the lease may be terminated?
Do the leases contain such clauses?
Mr. Serge Larose: As far as I know, our primary concern is on the other side of the question, to protect the band.
Your question concerns the individual's right to terminate the lease in response to an action that violates his rights.
Mr. Claude Bachand: That's not the only aspect. The band council could also terminate the lease if the lessor did not meet certain conditions.
Are there lease termination clauses in all the leases you negotiate? In other words, shouldn't the Department establish a lease termination policy?
Mr. Serge Larose: As regards the termination of a lease, by the Department or by the band, the delegation of powers we're speaking of does not give the band this kind of authority, which is reserved for the Department and Her Majesty, with the help of the Department of Justice.
Mr. Claude Bachand: The Department of Indian Affairs and the Justice Department could terminate a lease?
Mr. Serge Larose: Yes, depending on the circumstances. In case of default of payment, for example, by the lessee, the band does not have the power to terminate the lease for this reason. It must submit a report to Her Majesty, who, with the help of the Department of Justice, will undertake the necessary procedures.
Mr. Claude Bachand: Is this the withdrawal of delegated power aspect you spoke of a moment ago under section 60?
Mr. Serge Larose: No. The power to terminate a lease has never been granted to a band; it has always been reserved for Her Majesty.
Mr. Claude Bachand: Very good.
Mr. Michel Blondin: Mr. Bachand, the only thing we have begun to consider are provisions concerning alternative conflict resolution methods that we would like to include in the new leases and when existing leases are renewed. At present, the only option is to put the matter before the Federal Court. We have begun to consider these options with certain First Nations which are already managing their own leases.
The Chairman: Thank you, Mr. Blondin.
Mr. Nault.
[English]
Mr. Robert Nault: That touches on the area I was interested in. Whether it be taxes under this other section of the Indian Act, that first nations can charge those who are leasing property from them, or the cost of the leased land itself, if the individual who is leasing the land is not happy with the fee that is being proposed, what is their legal recourse under this particular statute? You have said to my colleague that this is very much contract law. For all intents and purposes, there is very little difference between this and any other commercial contract that a non-native would enter into. So when I rent out the land I own to a non-native and they don't like it and I don't meet the specific contract they've signed with me, what is their option? I know what it is in the non-native world. What is it under this particular arrangement that you have under this particular section of the Indian Act?
[Translation]
Mr. Serge Larose: I would say that, for 90 percent of the leases we now have....
[English]
The only provision, as Michel mentioned, is the opportunity for the lessee to go to the federal court if they have any disagreement with either the rent level or other sections....
Mr. Robert Nault: As I understand it, under the particular case that my colleagues across the way are focusing on, that's been done.
Mr. Serge Larose: Many times.
Mr. Robert Nault: The courts have made some decisions. As I understand it, the individuals in this particular case who live there don't like the ruling of the courts. Neither do my colleagues, by the sounds of it. What they would like to do is have the Minister of Indian and Northern Affairs—forget about its fiduciary responsibility—fix it because they don't like what the courts have to say. I can understand that. There are some court rulings I haven't really been too happy with myself over the years, but you have to learn to live with the due process of law, as I understand it, if you believe in a democratic society.
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If this goes to an appeal, which it has, and the courts rule very
similarly again, what are the options left for the Minister of Indian
and Northern Affairs? That's very much a legal question. If the
courts—and this is all hypothetical—rule very similarly to the
previous ruling, which laid out what the fair market value was—and it
didn't deal with the tax issue, as I understand it; it dealt with the
fair market value of the land. The tax issue is a different part of
the act, and my colleague sort of missed the boat on this a little bit
when he wanted to study this, but we'll talk about that privately.
What would be the options left under the minister's fiduciary obligation under this particular Indian Act? Or do I need to get Justice over here to answer that question?
Mr. Robert Eyahpaise: If the Supreme Court or any other higher court opposes the decision, there are really no options but for the minister to honour the decision of the court.
Mr. Robert Nault: Okay.
[Translation]
Mr. Claude Bachand: Perhaps we could elect the judges to the House of Commons, Mr. Chairman.
[English]
The Chairman: Mr. Scott.
Mr. Mike Scott: I have one very short question, and you may not want to answer this. I hate to put you on the spot, but I'll ask it anyway.
I think the fiduciary obligation, as I understand it, of the minister is to act in the best interest of the band. I'm going to ask you if it's the department's opinion...maybe the department doesn't have an opinion or maybe it doesn't want to express that opinion, and if you don't, I think that's fair game. But I'm going to suggest that because of the controversy surrounding Musqueam, that that entire controversy, the press that has been generated from it and the feeling of the Musqueam residents, the leaseholders, not being treated at all fairly—whether that's accurate or not, that certainly is the feeling of, I would say, the bigger percentage of the population of the greater Vancouver area. I would suggest that it's not in the band's best interest to have that kind of impression out there in the public. I would suggest that it's not in the band's best interest to have this controversy and that the band's image has been seriously damaged by this.
Does that not also come into consideration when the department looks at this? Certainly I think there must be a lot of people within the department who are not at all happy with this turn of events, however it came about. There have to be a lot of people who are not happy with it, and I would hope there would be some solution to it so that it could be dealt with, so that it didn't hang around and end up going back to court and generating more headlines and so on. Is that not the view of the department? Is that not the view of people like yourselves? Would you not just as soon have this dealt with? The sooner it is dealt with, the better it is for everybody concerned, including the Musqueam Band.
Mr. Bob Watts: I'm not sure if there is any one single view. I would suspect that our view would kind of go like this: neighbours should find ways of living together, and people of goodwill can do amazing things when they sit down and try to settle issues that are common to both of them.
Mr. Mike Scott: Right.
[Translation]
The Chairman: There are no other questions?
Thank you, gentlemen, for being here today and for submitting these documents to us.
The meeting is adjourned.