PART I – RESERVE LAND MANAGEMENT:
AN OVERVIEW

There are 3,003 reserves in Canada with a combined area of 3.8 million hectares.[9] The unique nature and legal status of First Nations’ reserve lands gives rise to particular challenges not present in the off-reserve context. This status affects how reserve lands can be developed, transferred, alienated and registered. In order to better understand some of the complexities of reserve land management and associated challenges for sustainable economic development, a review of some of the more salient features of reserve lands may be worthwhile, including the legal status of reserve lands, how and to whom lands can be transferred, how interests are created and registered, and current land management regimes.

A. Nature of First Nations Reserve Lands

Historically, reserve lands were set aside by the federal government to provide protected land for the exclusive use and occupation of First Nations. Today, reserve lands continue to be held by the Crown for the collective use and benefit of First Nations communities.[10]

Federal responsibility for “Indians and lands reserved for the Indians” is set out in section 91(24) of the Constitution Act, 1867.[11] The Indian Act is the principal piece of legislation through which federal jurisdiction for “Indian lands” is exercised.

Section 18 of the Indian Act defines reserve lands, in part, as follows:

[...] reserves are held by Her Majesty for the use and benefit of the respective bands for which they were set apart, and subject to this Act and to the terms of any treaty or surrender, the Governor in Council may determine whether any purpose for which lands in a reserve are used or are to be used is for the use and benefit of the band.

From this definition, we are able to see that reserve lands are not, strictly speaking, “owned” by First Nations. Fee simple ownership — defined as absolute title to land, free of any other claims against the title, which one can sell or pass to another by will or inheritance — is generally not available on reserves.[12] Rather, legal title to the land remains with the Crown. Further, the Minister of Aboriginal Affairs exercises significant control and authority over land transactions on reserves. Today, ministerial approval continues to be required for most land transactions of First Nations operating under the Indian Act.

The Crown’s early preoccupation with protecting the Aboriginal land base from erosion is reflected in various provisions of the Indian Act. In particular, section 89 of the Act provides that reserve lands cannot be mortgaged, pledged or charged to any person other than a First Nation member or a First Nation band. The only interest in reserve land that is subject to seizure under legal process is a leasehold interest. Nevertheless, subject to restrictions on alienation (reserve lands cannot be surrendered for sale except to the Crown), Indian interest in land “entails the absolute and exclusive possession, use and enjoyment of the land and all its economic resources.”[13]

B. Types of Land Management Frameworks

There is no single land management regime that applies to all reserves in Canada. Rather, First Nations govern their lands pursuant to one of three broad types of land management regimes, with ascending levels of land governance authority:

• The Indian Act land management framework;
• The First Nations Land Management Act; and,
• Self-government arrangements (either as stand-alone agreements or as a component of modern treaties).

Of the 617 recognized First Nations Bands in Canada, the vast majority (550) govern their lands according to the Indian Act. Its land-related provisions, which account for roughly a third of the Act, determine the formal arrangement of reserve land governance and forms of land tenure, setting out how governments, bands, organizations, and individuals can control, use, and transfer reserve lands. Many observers and First Nations economic development practitioners have suggested that the current Indian Act system of land management is too ponderous, overly complicated, and fraught with uncertainty.[14] The result of these deficiencies is that First Nations are unable to move “at the speed of business” and, as a result, lose economic opportunities.

The First Nations Land Management Act (FNLMA) provides the only alternative to land management under the Indian Act, outside of modern treaties and stand-alone self-government arrangements.[15] The FNLMA is a sectoral governance arrangement that removes participating First Nations from the land-related provisions of the Indian Act. Specifically, the regime provides First Nations with community-level jurisdiction over the management and administration of reserve lands and resources, short of full self-governing powers. Participating First Nations have the authority to pass laws for the development, protection, use and possession of their lands, and to issue leases and licences and to regulate other interests in their land. These laws are set out in a land code that must be ratified by the community before they can become operational. Importantly, although title to land continues to be vested in the Crown under the FNLMA, ministerial involvement over land management decisions on reserves is greatly reduced. Thus, while unable to sell land to third parties, participating First Nations are able to lease and develop their lands and resources in accordance with the rules set out in the ratified land code.[16]

First Nations with negotiated stand-alone self-government agreements and/or constitutionally-protected modern treaties enjoy extensive land management and law-making powers, irrespective of how lands are held. All such agreements recognize a First Nation’s jurisdiction to address, under its own policy framework, key aspects of land management, including the creation and registration of interests in land, zoning, and management of private land transactions.[17] Under modern treaties, signatory nations own land in fee simple collectively. However, individual fee simple interests have been granted, for example, under the Nisga’a and Tsawwassen final agreements, with the latter imposing restrictions on transferring land to non-members.[18] Since 1973, 24 comprehensive claim agreements (or modern treaties) have been signed and ratified and 18 self-government agreements have been concluded in virtually every jurisdiction across the country.[19] These include 16 self-government agreements completed in conjunction with comprehensive land claims as well as 2 stand-alone self-government agreements with the Sechelt and Westbank First Nations in British Columbia.

C. Land Tenure Arrangements under the Indian Act

Under the Indian Act, individual First Nation members and bands do not hold fee simple title to land.[20] However, it would be a mistake to assume that reserves function exclusively as enclaves of collective property.[21] Indeed, various forms of individual land holdings or “allotments” for on-reserve band members are available. Although not in the form of fee simple title, the three main types of individual holdings on-reserve include: customary land holdings, Certificates of Possession (CPs) and leasehold interests.

• Customary land holdings: Customary land holdings are the most common form of individual ownership on reserve lands. Individuals or families acquire tracts of reserve land by an allotment of the band council. Customary land holdings lack legal protection as well as recognition by the federal government through the Indian Act, or other legislation, and therefore, are typically not enforceable in courts. Accordingly, land-related disputes are generally handled by the band council. With some notable exceptions, these land holdings are not formally recorded or registered in a centralized data base.[22] Thus, while they can be passed down to other family members, they generally cannot be sold in any formally-documented manner.
• Certificates of Possession: CPs are a more formalized type of individual property right found on reserves, and most closely resemble fee simple ownership. With statutory recognition under the Indian Act, CPs provide a level of tenure security not enjoyed under customary land holdings. Issued under the authority of the Minister of Aboriginal Affairs subsequent to band council approval, they are evidence of an individual’s lawful possession to a land holding. CPs are enforceable in court, can be transferred to other band members or to the band itself (in whole or subdivided), leased to third parties, including non-band members, and used as collateral in specialized band-backed mortgages of housing loans.[23] They cannot, however, be seized, pledged or mortgaged.
• Leasehold Interests: Reserve lands can be leased to any third party pursuant to the relevant provisions of the Indian Act. Reserve lands leased to non-band members for development purposes fall into two main categories: Certificate of Possession Lease and Lease of Designated Land.[24] The process for leasing reserve land is different depending on whether the land in question is held by the band (designated lands) or by an individual member (CPs). Unless the First Nation operates under the FNLMA or self-government agreements, lands are leased by the Minister on behalf of the band or the individual CP holder. However, all leasing revenues accrue to the benefit of the First Nation, or individual member, as the case may be. Unlike CPs, leasehold interests can be mortgaged and seized.

D. Registering Reserve Land Interests

Currently, most interests in reserve lands are registered in the federal Indian Lands Registry System (ILRS), and not in the provincial land title system. Because the ILRS is a deeds-based land registry system, the registrar is not responsible for verifying the legal validity of the registered documents maintained within the registry.[25] In contrast, provincial land registry systems applicable off reserves, such as the Torrens land title system, provide certainty of title in the registry, a system of priorities for ranking competing interests, and assurance that the registered owner is the true owner of the title. Since deeds-based land registries oblige the parties to undertake historical research of all land transactions to ensure the chain of title, they are often more costly and difficult to use than land title systems. For these reasons, off-reserve land registry systems are typically said to be more effective in providing tenure security and a level of confidence to investors, thus facilitating economic development.

In addition to the ILRS, AANDC maintains two additional registry systems:[26]

• The First Nations Land Registry System for First Nations who operate under their own land code pursuant to the FNLMA; and,
• The Self-Governing First Nations Land Register established in accordance with the terms of self-government agreements to record documents that grant an interest in self-governed First Nation lands.

Source: Aboriginal Affairs and Northern Development Canada, Land Base Statistics.

It is important to note that customary land holdings and any other unregistered, unapproved transfers of lawful possession would not show up on a search of the ILRS.

E. The Federal Role

AANDC and the Minister exercise the greatest authority in relation to First Nations land management under the Indian Act. Importantly, the Department’s role decreases as First Nations move away from the Indian Act and toward more autonomous regimes, such as the FNLMA.

AANDC carries out a range of land administration functions and transactions for First Nations operating under the Indian Act regime, including:[28]

• Approving individual land allotments (CPs) and related transactions;
• Issuing permits and leases for activities on-reserve, including commercial, industrial and residential activities;
• Designating land for leasing;
• Registering interests in the ILRS;
• Reviewing and recommending proposals for Additions to Reserve (ATR) policy;
• Surveying reserve boundaries and individual parcels;
• Monitoring compliance in respect of terms of leases and permits, and collecting revenues;
• Managing environmental issues, including environmental assessment, remediation of contaminated sites, and solid waste management.

The Department also assists First Nations in developing their land management capacity through its Reserve Land and Environment Management Program (RLEMP).[29] Initially launched in 2005 as a pilot program, RLEMP replaces the Department’s previous land management programs (53/60 Delegated Authority and Regional Lands Administration Programs) and expands the responsibilities transferred to First Nations under those programs.

Designed to be a more fully integrated land and environmental management program, RLEMP seeks to establish the conditions under which First Nations are able to exercise increased responsibility over their reserve lands, including environmental management, rather than having those functions performed primarily by the Department. Specifically, First Nations are able to assume certain responsibilities under the Indian Act, such as community land use planning, environmental management, natural resources management, compliance monitoring, and administration of land transactions.[30]

Under the Program, First Nations also receive financial support for land management, and can participate in a two-year professional capacity building program delivered by the University of Saskatchewan and the National Aboriginal Lands Managers Association. To be eligible to participate in RLEMP, a First Nation must have a land manager, active registered land transactions, and a track record of good financial management.[31]

F. Land Modernization

In addition to the reform and consolidation of its land management programs, since the 2009 launch of the Federal Framework for Aboriginal Economic Development,[32] the federal government has sought to identify a range of options to allow First Nations greater control over their lands and resources. A key aspect of this “land modernization” agenda is to ensure that appropriate land management tools, including legislative and regulatory initiatives, are put in place to facilitate economic development on reserves.[33] Recent federal reforms in this area include the following measures:

• Bill C-45: The Jobs and Growth Act, 2012, simplified the process by which First Nations can lease designated lands, by reducing the voting threshold prescribed by the Indian Act from a double majority to a simple majority community vote, and by allowing the Minister of Aboriginal Affairs rather than the Governor in Council to approve land designations.[34]
• The establishment of a joint AANDC-Assembly of First Nations working group on ATR to explore options to expedite the lengthy ATR process in order to enable First Nations to take advantage of economic opportunities.[35]
• A commitment in Budget 2011 to reallocate up to $20 million in funding over two years to allow for new entrants into the FNLMA. Subsequently, in 2011, Canada and the First Nations Lands Advisory Board signed a memorandum of understanding regarding a new funding formula, paving the way for 18 additional First Nations to join the FNLM regime in January 2012. A further $9 million was committed in Budget 2013 to expand the First Nations Land Management Regime, supporting eight new entrants.[36]
• Legislative amendments to the FNLMA eliminating the requirement to conclude environmental management agreements with the federal government prior to developing local environmental laws.[37]

A potentially significant proposal for reserve land tenure reform was announced in Budget 2012. Endorsing a previous recommendation of the House of Commons Standing Committee on Finance,[38] the federal government signalled its intention to explore with interested First Nations the option of moving forward with legislation that would allow private property ownership within current reserve boundaries.[39] This proposal, advanced by the First Nations Tax Commission, is discussed in greater depth later in the report.

G. What the Context Tells Us

This cursory review of the reserve land management framework hints at the special challenges presented when contemplating reforms. Although the Indian Act can frustrate and delay reserve economic development, it is also seen as affording First Nations certain protections, especially with regard to preserving the integrity of the reserve land base. This seeming contradiction was captured by Andrew Beynon, Director General, Community Opportunities Branch, AANDC, who noted that while many First Nations are desirous of full autonomy over the governance of their lands, others prefer not to terminate Canada’s role in respect of those lands, considering that “Canada owes specific fiduciary obligations related to reserve lands.”[40]

These conflicting roles, together with differing conceptions of the land, tenure arrangements and community capacity can intensify the complexities of reform. Despite these challenges, many First Nations are seeking to develop modern and professionally managed land management systems that will allow their communities to tap into outside investment as well as the wealth locked in their lands and resources. The next two sections summarize what the Committee heard in respect to some of the challenges confronting First Nations in developing reserve lands and their proposals for addressing some of those challenges.