Land is central to virtually all forms of economic development, and this is no less true for First Nations’ reserve lands. Consistently, First Nations told us that inappropriate laws, inefficient bureaucratic processes and deficits in community and institutional capacity have prevented First Nation communities from taking advantage of the wealth locked in their lands. First Nations across the country also expressed a strong desire to develop their lands in ways that are consistent with their cultural aspirations. We heard unequivocally that land management initiatives should support First Nations’ priorities and further community efforts to move away from the restrictive and outdated Indian Act and along the governance continuum toward full self-governance.

During the course of our study a number of important and, we believe beneficial, measures were introduced by the federal government to improve land management processes on reserves. As outlined earlier in the report, the ratification threshold for land designations under the Indian Act was amended to a simple majority from the more onerous double majority requirement, facilitating the ability of First Nations to lease designated lands and take advantage of economic development opportunities. In addition, the statutory requirement under the FNLMA to negotiate environmental management agreements with federal authorities was eliminated, paving the way for participating First Nations to enact their own environmental regulations. Based on the testimony outlined in this report, we find that these changes respond to several of the key concerns expressed by First Nations and will prove to be of significant benefit to them.

As we draw our report to a close, we are mindful that the unique nature of reserve lands, existing tenure arrangements, differing levels of community capacity, as well as First Nations’ special relationship to the land, present some particular challenges when contemplating land management reforms. While this complexity can be daunting, we have tried to resist the urge to simplify the issues. Whatever land management reforms are eventually initiated, we firmly believe the arrangements most likely to succeed will be those most closely aligned with First Nations’ priorities and aspirations.

A. Addressing the Deficiencies of the Indian Act Land and Environmental Management Regime

The vast majority of First Nations must manage their reserve lands under the constraints of a centuries’ old legislative framework. Today, over 550, out of 617 recognized First Nations, operate under the land administration framework set out in the Indian Act.[154] With the exception of First Nations who have negotiated comprehensive governance arrangements or those operating under the First Nations Land Management Act, the Indian Act’s land-related provisions continue to influence how most First Nations can develop or profit from their reserve lands.[155]

It would be unrealistic to assume that a great number of these communities will be able to make the transition to the First Nations Land Management regime or negotiate full self-government agreements within the next few years. First, many are simply not ready to do so. First Nations, such as the Penticton Indian Band, told us that they prefer a phased approach to land management; one where, over time, they are able to build the needed capacity and experience to take on greater responsibilities. They are not alone in this view. We find that communities should be encouraged and allowed to evolve through a series of steps, based on the level of community readiness, which would gradually get them out from under the strictures of the Indian Act.

Secondly, notwithstanding recent federal investments, progress in extending the application of the FNLMA to additional First Nations has not kept pace with demand. Currently, there are over 48 First Nations on the waiting list and still many more have expressed an interest in entering the regime. Even at enhanced funding levels, it could likely take decades to transition the majority of First Nations from the Indian Act to the FNLM regime.

Given that most First Nations will continue to operate under the Indian Act’s land administration framework for the foreseeable future, it is important that they not be held back from sustainably developing their reserve lands to their optimal economic benefit. The need to minimize the barriers to reserve land management posed by the Indian Act, as well as departmental practices that are inefficient, overly bureaucratic and time-consuming, becomes even more relevant when we consider that a great number of these First Nations are among some of the most economically disadvantaged communities in the country.

While we are firmly of the view that alternatives to the Indian Act that deliver improved forms of land governance must be strengthened, limited financial resources and community capacity mean that making changes to the Indian Act, and accompanying departmental policies and regulations, is critical. Based on the evidence placed before the Committee, we are of the view that reforms in this area must focus on (i) improving the legislative basis and tools for reserve land management available to the majority of First Nations who currently manage their lands under the Indian Act; and (ii) ensuring that the Department’s processes, practices and policies are responsive to the land management and economic development needs of First Nations.

(i) Environmental Management

A key area with which the Committee is concerned, and on which it heard considerable evidence, is the overall lack of environmental protection on reserves and the resulting negative implications for community health, safety and economic development. Reserve lands currently do not benefit from the full range of environmental protection that applies off-reserves. The Committee finds that the lack of effective environmental regulations, enforcement and surveillance has left many First Nations communities exposed to conditions that other communities are protected from by regulation and enforcement.

A consequence of the weak environmental regulatory regime on reserves is the inability of First Nations to effectively regulate activities on CP lands, which frequently give rise to environmentally unsound land use activities. In this respect, we found that penalties under the Indian Act for environmental violations are not strong enough to act as an effective deterrent. Fines under the Indian Reserve Waste Disposal Regulations for dumping or burning garbage on reserves without a permit, for example, cannot exceed $100.[156] In addition, we heard that AANDC issues few permits and is not well-equipped to conduct inspections, monitor compliance, or enforce regulations. As a result illegal garbage or landfill sites are commonly found on reserves.[157]

We believe that strengthening existing penalties for environmental violations under the Indian Act is essential, but that this measure alone is not an adequate response to the depth of the environmental regulatory gap on reserves. First Nations’ capacity to develop, monitor and enforce appropriate environmental standards on reserves must also be strengthened. The Committee is of the firm view that First Nation communities should enjoy the same level of environmental protection as non-First Nations communities and that sustainable economic development depends on a clean and healthy environment. We therefore recommend as follows:

RECOMMENDATION 1

That Aboriginal Affairs and Northern Development Canada and Environment Canada, in collaboration with First Nations, take immediate steps to develop an action plan to address the environmental regulatory gap on reserves to be tabled before this Committee by 31 March 2015; and that the plan include measures to strengthen existing penalties for environmental violations under the Indian Act, community capacity for environmental management and remediation, and that it identify specific areas of legislative and regulatory development.

(ii) Land Management

In addition to strengthening the tools for environmental management of reserve lands, improving reserve land management with respect to tenure security, land use planning, leasing, and land registration are key concerns. In particular, we find that privately held interests in reserve lands, such as customary land-holdings, are not well documented. As a result of this tenure uncertainty, many First Nations’ communities find that undertaking large-scale economic development on reserve lands can be challenging. On the flip side, lacking formal legal recognition, individuals have little recourse if lands are taken up by the band. Accordingly, the Committee believes that efforts to formally document customary land holdings should be supported and aggressively pursued, with interested First Nations.

The Committee also finds that current statutory restrictions in relation to CPs need to be more closely examined and addressed. As discussed earlier, First Nation individuals can only transfer their CPs to other band members. In addition, they cannot use their CPs as collateral to secure financing from banks due to the restrictions on pledge and seizure by virtue of section 89 of the Indian Act. CP holders must also obtain ministerial and, where appropriate, band council approval, if leasing CP lands to a non-band member. Together, these restrictions can raise transaction costs associated with CPs and represent some of the principal barriers to being able to use CP lands to access capital.[158]

In addition to these constraints, the Committee also finds that deficiencies in the formal recording of land holdings in the Indian Lands Registry System (ILRS) are problematic. According to the National Aboriginal Economic Development Board, it can take an average of a few days to register a mortgage in British Columbia in comparison to an average of 180 days to complete an equivalent registration under the ILRS.[159] While we acknowledge the efforts of the AANDC to explore the possibility of allowing First Nations to submit their records electronically (currently the case for provincial land registries), we feel that online registration, while positive, is insufficient to address the fundamental, structural flaws of the current system. As identified earlier in the report, unlike provincial land registries, the ILRS provides no assurance as to title or as to priority of interests, nor is there a requirement to register interests in land. Overall, the Committee believes the lack of rigour associated with the Indian Act land registry system in protecting third parties’ legal interests in land are disincentives to economic development and impede outside investment.

Further, the processes by which reserve lands — whether band or individually owned — are leased must be given serious attention. As we saw earlier, leases are a vital economic tool for many First Nations and the legal mechanism for land development on reserves. Across the country, First Nations regularly lease their lands to non-members for a variety of commercial and residential development purposes. Creating leasehold interests in reserve land also allows a First Nation or individual member to circumvent the “pledge and seizure” restrictions of section 89 the Indian Act, making it easier to obtain financing from lending institutions.

The process for leasing reserve lands, however, is not straightforward. Band-owned lands, for example, must first be “designated” through a community referendum for that purpose. Similarly, CP-held leases require band council and ministerial approval, and for terms over 49 years, community approval. Repeatedly, we heard that departmental practices and procedures with respect to leasing of interests in reserve lands were cumbersome and that delays in obtaining approvals at the band and ministerial level often resulted in lost business opportunities. Streamlining departmental procedures for obtaining leases on reserve lands is critical to the economic outcomes of First Nations and an issue that we believe must be examined as a matter of priority.

Lastly, the Committee finds that many of the issues facing First Nations are, in part, a function of the lack of effective land use planning. Currently, few First Nations have land use plans in place to facilitate orderly development and assist with environmental protections and controls. Enhanced land use planning can be invaluable in supporting sustainable approaches to reserve land development. Such plans can promote regulatory harmony with neighbouring municipalities, laying the ground work for economic partnerships, as well as engage community members in land use decisions. However, the Indian Act provides a limited statutory basis for the development of comprehensive land use plans.

Issues of land tenure, registration, leasing and land use planning are all interconnected. Even a Torrens-style land registry system, for example, would be of limited use to First Nations whose customary land holdings remain formally undocumented. Accordingly, where possible, we believe that the issues identified above must be considered together and recommend as follows:

RECOMMENDATION 2

That Aboriginal Affairs and Northern Development Canada, in collaboration with First Nations, take immediate steps to identify legislative and policy proposals to address the restrictive aspects of the Indian Act land management regime and associated departmental policies and practices, and table an action plan before the Committee by 31 March 2015, with a focus on:

• Exploring mechanisms to enhance land use planning capacity on reserves;
• Allowing First Nations the option of lifting restrictions placed on the use of property as collateral under the Indian Act;
• Modernizing the current system of Indian lands registration system;
• Streamlining departmental procedures as they relate to the leasing of reserve lands to third parties by reducing approval requirements and developing templates for reserve land leases; and,
• Establishing a process, with interested First Nations, to formally document and register privately held interests, such as customary land holdings.

B. Strengthening Alternatives to the Indian Act

(i) The First Nations Land Management Act

Outside of comprehensive self-government arrangements, the FNLMA is widely considered among First Nations to represent a modern institutional framework by which to address contemporary land management issues on reserves and facilitate economic development. By providing participating First Nations with a greater measure of local control over reserve lands and resources, and by ending ministerial discretion over land management decisions on reserves, the FNLMA represents an important alternative to land management under the Indian Act. Independent studies confirm that First Nations operating under the FNLNA manage their lands more competitively and transparently, and are better able to expeditiously complete land transactions and at a lower cost than what is possible under the Indian Act.

Given the well documented and substantial economic benefits of the FNLMA, as well as its widespread appeal among First Nations, we find that every effort must be taken to reduce barriers to accessing the FNLMA. In this respect, Committee members are encouraged by recent federal investments that have allowed an additional 26 First Nations to opt-in to the regime and begin their journey toward greater self-reliance.

We note, however, that demand is far out-stripping available resources and will likely continue to do so for the foreseeable future. Accordingly, while we believe that the FNLMA regime must be adequately resourced, other financing options — such as allowing interested First Nations to self-fund their entry into the regime or allowing First Nations to pool their resources — should also be considered.

The Committee finds that the FNLMA represents an important vehicle for reserve land tenure reform for the vast majority of First Nations, one with proven economic benefits, and should be fully supported. We therefore recommend as follows:

RECOMMENDATION 3

That Aboriginal Affairs and Northern Development Canada take the necessary steps to extend the application of the First Nations Land Management Act with a focus on:

• Ensuring that First Nations currently operating under the Indian Act land management regime are provided with the training necessary to transition to the FNLMA in a timely manner;
• Ensuring that the current signatory First Nations to the FNLMA regime are provided with the support necessary to become fully operational and to meet the increased requirements of the regime, including developing their land codes; and
• Addressing, on an urgent basis, the backlog of applicants currently awaiting entry to the FNLMA regime, and exploring, in collaboration with the First Nations Lands Advisory Board, financing options to allow for greater First Nations’ participation in the regime.

(ii) The Proposed First Nations Property Ownership Act

Currently, neither First Nation members nor non-members can acquire a fee-simple interest in reserve lands under the Indian Act or the FNLMA. Under both of these regimes, legal title to the land remains with the Crown and, as a result, the greatest interest that a third party can acquire in reserve lands is a lease.

The absence of a fee simple property system on reserves is seen by some as limiting the economic prosperity of First Nations.[160] Proponents of the proposed First Nations Property Ownership Act (FNPOA) suggest that by strengthening the property rights regime on reserves two of the main barriers to economic development would be addressed: the lack of tenure security and the high transaction costs inherent with the property rights regime under the Indian Act.[161]

Significantly, under the FNPOA a participating First Nation would be able to grant individual property rights to its members who could then leverage or sell those rights, presumably, to their economic advantage. In this view, the ability of ownership rights in land to be traded freely like any other commodity, combined with a formal registration system, such as the Torrens system in British Columbia, would provide First Nations with the necessary tools to access capital and create markets on reserve lands. In response to concerns that the integrity of the First Nations land base could be compromised by individuals selling off their land to developers or to other third parties, proponents indicate that underlying title or reversionary rights to the reserve land base would remain with the First Nation, irrespective of who owns individual parcels.

The Committee acknowledges that this initiative has drawn criticism from several First Nations and commentators, including before the Committee, who see the proposal as a mechanism for alienating First Nations lands.[162] The fear is that privatization will not necessarily result in greater economic prosperity, but rather, the dissipation of the First Nations land base as parcels of land are sold off or lost through foreclosure to non-First Nations owners.

While we recognize these concerns, we nevertheless feel that the FNPOA is a legitimate response to growing First Nations’ frustrations with land management processes under the Indian Act and the extent of poverty and lack of development opportunities on reserves. However, while the Committee believes that First Nations should not be denied the full range of property rights that other Canadians enjoy, there are complex legal questions that need to be addressed should this legislative initiative be introduced in Parliament, including:[163]

• How will reserve lands be transferred to fee simple ownership without having provincial jurisdiction apply to those lands?
• What legislative regime will apply to FNPOA lands and what will be the source of the legislative power?
• How might the creation of fee simple title affect other Aboriginal rights which attach to the land?
• How will titles on reserve be cleared for registration in a Torrens system when there are so many historical conflicts over CPs, family lands and boundaries on most reserves?
• How will AANDC manage its limited resources to support another land management regime? How will this affect resources currently allocated to existing land management regimes?

Our findings suggest that while tenure security is vital to economic security, the nature of that security is not necessarily tied to formal individual title. In many instances, a long-term lease, rather than freehold title, may be a less risky and more appropriate form of tenure for First Nations communities, as evidenced by the fact that existing property rights instruments, such as CPs, have not been widely adopted.[164] In addition, the number of First Nation communities interested in, and that might benefit from, the extension of individual fee simple title may well be limited given their location far from urban or semi-urban areas and markets.

A primary assumption of proponents of FNPOA is that the creation of fee simple title will lead to economic development and the creation of wealth in First Nations communities. Interestingly, we found that most economic development on reserves occurs largely on band-owned lands. However, communities such as Mashteuiatsh First Nation, told us that economic development was impeded because much of the reserve land base has been allocated to individual band members through pre-existing CPs. Though somewhat counter-intuitive, it would appear that fee simple property rights may not necessarily lead to economic development on reserves. Rather, wealth creation may depend on a combination of factors such as geographic location, stable and transparent governance framework, the health of the regional economy, transportation corridors, and availability of infrastructure, in addition to individual fee simple titling.[165]

Fundamentally, the Committee believes that First Nations should be able to determine for themselves the types of land tenure arrangements that are most appropriate for their communities, based on their local circumstances, aspirations and prospects for economic development, including fee simple title. However, the proposal is likely to have implications for federal, provincial and First Nations governments. While we find the FNPOA to be a worthwhile initiative, there are a number of outstanding questions that require serious consideration and independent analysis so that any First Nation choosing to undertake this type of land tenure reform can do so, on a voluntary basis, with full knowledge of both the potential risks and benefits. The Committeee therefore recommends as follows:

RECOMMENDATION 4

That the federal government continue to explore options to allow First Nations living on reserve to obtain, on a voluntary basis, the benefits of private property ownership.

C. Expediting the Process of Adding Land to Reserves

For many First Nations, economic development is tied to the expansion of the reserve land base. Accordingly, the process by which land is “added” or converted to reserve status is of particular relevance to the Committee. There was almost universal agreement across the country that the federal Additions to Reserve policy and associated procedures are costly, cumbersome and time-consuming. The majority of First Nation witnesses were extremely critical of the time it takes to add land to reserves, noting that the process can take up to several years to complete, with significant financial and economic impacts often borne by First Nations as a result. Some First Nations went so far as to describe the process as “absurd”, “cumbersome” and “horrible”.

We found this evidence to be problematic, especially because the process by which land is added to reserves is critical to enhancing economic opportunities available to First Nations, providing many with a chance to select lands more favourably situated for investment and development purposes. Currently, land selected for reserve conversion is subject to a somewhat convoluted 12 step review/approval process designed to ensure the selection meets basic legal and environmental requirements.

The Committee is of the view that the Department’s current ATR policy is difficult to navigate, and includes unnecessary steps which can lead to long delays and confusion. While we welcome the Department’s collaboration with the National Aboriginal Lands Managers Association in the development of the ATR Toolkit designed to assist First Nations in navigating the policy’s various requirements, we nevertheless feel that a review of the policy, last updated in 2001, is timely. Review objectives, in our view, should include identifying reductions in processing times and introducing procedural flexibility for lands that are considered “conversion ready” or otherwise unencumbered by various third-party interests and environmental liabilities.

The Committee also finds that although the ATR process is a lengthy one, the time it takes to complete the process may not, in a number of instances, be unreasonable given the seriousness of the undertaking. Because the Government of Canada assumes liability for lands converted to reserve status, the requirements for reserve creation and expansion will necessarily be stringent. In addition, title searches, environmental site assessments and possible remediation, surveys and negotiations with affected third parties all take considerable time and effort to complete.

We heard concerns from certain municipal organizations that municipalities do not have sufficient opportunities under the existing policy to raise, or have their concerns addressed, in the event that they do not support an ATR. They indicated that the federal government has a role to play to help support better relations between First Nations and affected municipalities when an ATR policy has been advanced for consideration.

We feel strongly, however, that First Nations should not be prevented from taking advantage of economic opportunities on lands selected and accepted for reserve creation, irrespective of the time it takes to convert those lands to reserve status. Specifically, the Committee believes that the option currently available to First Nations under the claims settlements implementation legislation in the Prairies to arrange for pre-reserve designation on selected lands should be extended to all First Nations. The ability to designate interests on pre-reserve lands could be of substantial economic benefit for First Nations as it would allow for these interests and potential development agreements with third parties to be recognized and become active the moment the lands obtain reserve status. Given the importance of reserve expansion to the economic and social well-being of First Nations, and in recognition of the length of time it takes to fulfil the various legal and policy requirements of the ATR process, the Committee recommends as follows:

RECOMMENDATION 5

That Aboriginal Affairs and Northern Development Canada, in collaboration with First Nations, and where appropriate, local governments, explore legislative proposals to allow for pre-reserve designations on lands selected by First Nations for conversion to reserve status; and

That Aboriginal Affairs and Northern Development Canada take immediate steps to review its 2001 Additions to Reserves Policy, with a view to:

• streamlining procedural requirements;
• reducing processing times; and
• addressing stakeholder concerns.

AREA OF FURTHER STUDY

During the course of our hearings, one of the primary challenges raised before the Committee concerned the “legacy issues” that result when individual interests in land are not formally documented or otherwise lack legal recognition. Not surprisingly, many of these legacy issues pertain to the wills and estates of First Nations individuals; in particular, when determining the descent of property interests on the reserve.

Our recommendations around clarifying land tenure arrangements on reserve through the formal documentation of customary land holdings and title-based land registry systems are intended to address some of these legacy challenges. However, the range and complexity of issues related to the administration of wills and estates on reserve, which touch upon, inter alia, land management, citizenship, matrimonial property, solemnization of marriages and financial management, extend beyond the scope of our current study.[166]

While the Committee was unable to deal with the particular issue of wills and estates directly in this report, we wish to underscore the importance of addressing this matter as one of considerable priority. Disputes in relation to the wills and estates of First Nation members relating to reserve lands can take several years to resolve, and have serious implications for individuals and communities, alike. Recognizing the importance of this subject matter, members of the Committee commit to examining this issue in greater depth at a future date.

CONCLUDING REMARKS

The sizeable and growing First Nations reserve land base represents significant economic opportunities for First Nations. Central to unlocking this potential and helping First Nations to move forward on a sustainable economic path is access to modern and effective land management tools. As First Nations seek to realize the economic potential stored in their lands, there is growing frustration with existing land management processes that neither adequately meets contemporary needs nor responds to community aspirations for growth.

The Committee recognizes that without the contemporary tools and capacity to effectively manage their reserve land base, the opportunities and standard of living enjoyed by First Nations will continue to be unnecessarily limited. We have listened carefully to the legitimate concerns expressed by First Nations concerning the negative effects on economic development of the Indian Act land management regime, and have put forward a number of recommendations in an attempt to assist First Nations in their aspirations to manage and develop their lands more effectively.

Specifically, we find that serious efforts must be taken, in partnership with interested First Nations, to modernize the current system of land tenure and registration under the Indian Act. An efficient land registry system, coupled with a greater tenure security, is an area for immediate investigation and is central to maximizing the economic value and potential of reserve lands, whether band or individually owned.

Given the restrictions and layered bureaucratic processes associated with managing reserve lands under the Indian Act, we are of the firm view that measures to allow First Nations to opt out of the land-related provisions of the Act and to manage their lands more competitively, such as the First Nations Land Management Act, must be supported, expanded and appropriately funded. Ultimately, First Nations who are able to transition away from the Indian Act and take on greater responsibility for land transactions will be in a better position to realize the economic value stored in their lands. Finally, while the Committee believes that a range of land tenure reform options should be pursued, we observe that governance — that is, a strong foundation of laws and regulations — as well as community capacity, are essential components for the sustainable economic development of First Nations’ lands.