PART II – WHAT THE COMMITTEE HEARD

The Committee’s hearings, as well as its site visits, have enabled it to benefit from the insights of First Nations leaders, individuals, organizations and third party experts from across the country. The proceeding sections set out what we heard throughout the course of our study. In this section, we set out the testimony received in Ottawa, beginning with issues related to land and environmental management under the Indian Act, followed by alternatives to that regime; notably, the First Nations Land Management Act (FNLMA) and the proposed First Nations Property Ownership Act. Testimony related to land management capacity as well as the process for adding land to reserves is also set forth in this section. Issues raised during community site visits, for which transcripts are not available, have been summarized, and are reported separately in Part III of the report.

A. Land Management Under the Indian Act

The majority of First Nations in Canada manage their lands, with varying degrees of control and capacity, under the Indian Act. Witnesses appearing before the Committee suggested that the current Indian Act system of land management impedes the efficient management and administration of reserve lands and resources. First Nations are often unable to move at the speed of business and as a consequence lose time-sensitive economic opportunities.

Committee members were told that simple land transactions on-reserve can require multiple approvals and take up to five times longer to complete in comparison to transactions off-reserve, hindering economic investment and activity.[41] As noted by Chief Clarence Louie, Chair of the National Aboriginal Economic Development Board:

Under the Indian Act, land management processes involving common activities such as leasing and registration are expensive, complex, and often extremely slow. This presents significant challenges for large-scale, land‑based economic activity, such as major resource development.[42]

Commenting on the challenges of expediting land transactions under Indian Act processes, Chief Sharon Stinson Henry told the Committee:

First Nations do not have an ability to move swiftly in developing their lands as a result of the restrictions that arise under the Indian Act and the red tape that comes with them.[43]

Witnesses also expressed concern that Indian Act policies and accompanying procedures are applied uniformly by departmental officials, irrespective of the circumstances, in a one-size-fits-all approach. Witnesses suggested that departmental policies, whether they relate to designations, leasing or additions to reserve (discussed below), need to be flexible and responsive. Christopher Devlin suggested that it is this inflexible application of policies, more so than the Indian Act, which represents the greater impediment to economic development on reserve lands and the cause of most delays. He remarked:

The Act is there, but the policies I see are kind of one-size-fits-all. There’s no proportionality between the project and the policy … Essentially, whether you’re developing a corner store or a shopping centre, you have to follow the same policy. If you want to do a gas station or an LNG plant, you still have to go through the same policy to get that approved.[44]

(i) Leasing Reserve Lands

Witnesses were especially critical of the procedural requirements for leasing reserve lands to third parties — an important instrument for economic development. First Nation members holding Certificates of Possession (CPs) are required to obtain ministerial and band council approval if they wish to lease their land. The Department also requires community approval if the lease exceeds 49 years.[45] Likewise, a First Nation wishing to commercially develop “unallotted” reserve lands must do so through a formal designation process requiring the assent of a majority of the electors. In addition to these ratification procedures, the Department requires environmental assessments, surveys, project plans and appraisals for significant developments prior to lease execution.

The entire designation process could take several years to complete during which time a First Nation may have had to forego economic opportunities. Commenting on its complexity, Warren Johnson, President of New Road Strategies, observed that the process for designating lands for leasing:

suffers from using the highly onerous Indian Act surrender provisions, in terms of voting process, ratification thresholds, and the bureaucratic management process. The result is … [t]he designation process will require a minimum of 2 years to complete and more often … at least 3 … and drafting a new lease can take up to two more years, for a total of five years — hardly the speed of business.[46]

Accordingly, while many witnesses indicated that leases are a useful and powerful tool for economic development, the transaction costs associated with obtaining leases on reserve lands can be quite high. Some suggested changing the ratification procedures for designation votes to a simple majority of electors from the double majority requirement, as well as eliminating ministerial and possibly band council involvement in CP transactions, once allotted.[47] Representatives of the National Aboriginal Economic Development Board further suggested that the federal government can begin to increase the speed and effectiveness of all land transactions by setting and enforcing timelines and service standards for AANDC’s reserve lands management processes.[48]

(ii) Regulating Certificates of Possession

Along with measures to simplify processes for leasing reserve lands, strengthening the security of tenure on reserve (i.e., clarifying, documenting and regulating interests in reserve land) was also mentioned by several witnesses. A key concern in this regard relates to CPs. As noted by Warren Johnson, the Indian Act does not provide an effective legislative mechanism for either First Nations or the federal government to regulate CP land use.[49] Witnesses indicated that this “regulatory vacuum” gives rise to many of the questionable land use activities currently found on-reserve. Donald Maracle, Chief of the Mohawks of the Bay of Quinte First Nation, explained:

There are few restrictions for individual holders of certificates of possession in terms of how they use the resources on the land described in their certificate of possession … So if a band member has a certificate of possession, he may say he is going to open up a quarry on his land and it’s going to operate 24/7. There could be noise levels. It might lessen the groundwater of people who depend on their wells. There may be concerns that it may be polluting the river. With the machinery running back and forth, what is the impact of the heavy machinery on the local roads? It’s all those sorts of things.[50]

Witnesses who addressed this issue indicated that a mechanism under the Indian Act is required to allow for the effective management of CP lands, and as Chief Maracle further observed, “to pass and enforce band council resolutions to shut down operations if need be.”[51]

(iii) Certainty of Tenure

The Committee also heard evidence regarding the need to clarify and document existing privately held interests in reserve lands. According to John Gailus and Christopher Devlin, First Nations, especially those entering the FNLMA, spend much of their time dealing with land disputes that arise from unsettled and divided interests with regard to who owns, or is entitled to own, a parcel of land. Referencing the Auditor General’s 2009 audit on reserve land management, Frank Barrett of the Office of the Auditor General advised the Committee that: “we’ve been told of situations of a plot of land notionally being divided among dozens of descendants of the original CP holder to the point that it’s virtually impossible to know who everyone is who owns it, let alone how to re-gather it.”[52] Chief Clinton Phillips described the challenges facing his community of Kahnawá: ke, whose lands are 85% privately held, as follows:

Every issue in Kahnawá: ke has to do with lands and lack of lands that we can access. Personally, in my family, my grandmother inherited land with her siblings, and because of undivided interests and the family, her grandparents’ lot now has about 50 owners at last count. So somebody has to buy somebody out. And who’s going to win? This undivided interest is just not working for us; it’s just creating more of a headache, more layers on that onion.[53]

Christopher Devlin indicated that the challenge for communities wishing to undertake large-scale development is grappling with these “legacy issues” and suggests that they are best dealt with on a community-by-community basis rather than through legislation.[54] Christopher Alcantara, Assistant Professor in the Department of Political Science at Sir Wilfrid Laurier University, recommended that the federal government work with interested First Nations to formally document all customary land holdings and to develop band council resolution models that treat customary rights as binding written contracts that list comprehensively all the information about the land, who owns the land, a survey of the land, the types of activities that the band member is permitted to carry out on the land, and a clause that specifies under what conditions the band can expropriate the land and revoke the customary right. He also recommended establishing regional First Nation land adjudication committees, or courts, so that land allocation decisions and land dispute resolution decisions are made by an impartial legal body rather than by political bodies.[55]

(iv) Registering Interests in Reserve Land

Once clarified and documented, registering property rights in a title-based system was also proposed by some witnesses.[56] Witnesses suggested that inefficiencies affecting land registry systems on reserves are widely considered to be disincentives to economic development and impede outside investment. Currently, most interests in reserve lands are registered in the federal Indian Lands Registry System (ILRS), not in the provincial land title system. The ILRS has been criticized as lacking the necessary rigour to protect third parties’ legal interests in land. In addition, the transaction costs can be significantly higher as the parties must search a number of historical documents to ascertain effective title.

Given the effect of these uncertainties on potential investors, some have suggested that First Nations are often unable to realize the full value and benefit of their lands. In his work with the economic consulting firm Fiscal Realities, André Le Dressay, Director of Fiscal Realities Economists Ltd., concluded that the cost of establishing a marketable property right on First Nation land is at least four times more expensive than establishing the same property right off First Nation lands.[57] Commenting on the limitations of the ILRS, Chief Clarence Louie told the Committee:

[T]he Indian land registry is inaccurate, lacks clear standards, and is unable to guarantee certainty of land title for landholders. This is compounded by the fact that the Indian land registry does not have formal regulations that govern the system, that registering certain transactions can take anywhere from months to years, and that the system allows for multiple descriptions and ownerships to be registered against a single property.[58]

To address these deficiencies, Christopher Alcantara and Gordon Shanks recommend moving away from the current deeds-based registry toward a Torrens style title system which provides 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.

(v) Restrictions on Transferability of Title

Restrictions on the transferability of title (i.e., CP holders are permitted to sell or transfer their interest in land only to other band members) as well as the use of property as collateral under the Indian Act were also seen by some witnesses as potentially undermining the economic value of First Nations’ lands. With regard to the latter, some witnesses indicated that a key obstacle to reserve economic development arises from section 89 of the Indian Act which provides a broad exemption from pledge and seizure of the real and personal property of an “Indian or band” situated on reserve.

According to Chief Clarence Louie of the Osoyoos Indian Band, “by explicitly prohibiting the mortgaging of property on reserve,” section 89 of the Indian Act, “removes one of the key drivers of small business development.”[59] The Committee heard that banks are reluctant to provide financing to First Nations given the issues around security and rights of seizure resulting from the restrictions placed on the use of property as collateral by the Indian Act. This has led to a situation where securing financing for investment in economic development activities on reserve can be challenging.[60]

Christopher Alcantara indicated that while section 89 constrains band members from obtaining mortgages on the basis of their reserve lands to build housing or start a business, some First Nations have found innovative ways to get around these obstacles, for example, “by transferring their CP to the band council, for instance, for the life of the mortgage or the loan.”[61] Importantly, leasehold interests on designated lands can be mortgaged and transferred to non-First Nations members.

(vi) Land Use Planning

A number of witnesses appearing before the Committee highlighted the important linkages between sustainable community economic development and land use planning. Chief Tsannie of the Hatchet Lake Denesuline First Nation described land use plans as a “tool for good governance and decision-making,” in relation to the conservation, development, and management of lands and resources.[62] Effective land use plans, we were told, balance environmental protection, promote social and cultural values, and maintain opportunities for economic development.[63] They also facilitate the orderly development of lands as well as provide an important mechanism for formal community engagement.

Departmental officials advised that “without strong land use planning, it is difficult to efficiently manage residential, commercial and industrial development on reserve lands”.[64] Despite the importance of such plans, the Indian Act provides limited land use planning authority to First Nations.[65] Importantly, by-laws enacted under section 81 do not require community approval and can be disallowed by the Minister.

While some First Nations have developed basic municipal-type zoning and land use by-laws, the Committee heard evidence that First Nations do not have the authority under the Act to undertake comprehensive land use planning and zoning. Reflecting on the limitations of the Indian Act’s land use provisions, Andrew Beynon told us that:

First Nation communities typically do not have extensive land use planning facilitating orderly development and assisting with environmental protections and controls. There is a limited authority over zoning in the Indian Act that allows first nations to make zoning by-laws, but few first nations have established those zoning by-laws and none have the comprehensive systems for developing, updating, administering, and enforcing zoning undertaken in other communities in Canada.[66]

As a result of the limited land use planning authority under the Indian Act, many First Nations are challenged in their ability to harmonize their land use by-laws with neighbouring municipalities or identify areas where cooperation would be beneficial.[67] Underlining this point, Jennifer Copegog from the National Aboriginal Lands Managers Association, stated:

If you look at neighbouring municipalities, they govern and manage their lands based on a land-use plan; first nations don't have that right now. There may be some first nations out there who have land-use plans, but these plans are probably not as complex as what a municipality would have. [68]

The Committee recognizes that some First Nations are looking for more powerful land use planning tools. Because such plans can provide an important foundation for community economic development and management of conservation objectives, we were encouraged to learn that AANDC, through a pilot project, is working with selected communities to support the development of high-quality, comprehensive land use plans, consistent with community values.

(vii) Addressing the On-Reserve Environmental Regulatory Gap

First Nations individuals residing on reserves typically do not benefit from the same level of protection from environmental risks as those residing off-reserve. This gap in environmental management stems, in part, from the fact that constitutional authority for the environment is shared between the federal and provincial governments. However, due to federal legislative authority for “Indians and lands reserved for Indians,” provincial environmental laws relating specifically to lands and resources do not apply on reserves. This places the onus on the federal government to establish the legislative base for environmental protection and management on reserve lands.

According to Ronnie Campbell, Assistant Auditor General, Office of the Auditor General of Canada, “while the federal government has the authority to develop regulations on reserves, it has rarely used this authority to mitigate environmental threats that are regulated off reserves by provincial governments.”[69] Accordingly, few federal regulations are currently in place to protect the environment on reserves.[70] Further, the by-law authority of First Nations governments to step into this regulatory breach is limited under the Indian Act. Warren Johnson described the Act’s limitations in this regard as follows:

While First Nations have some local bylaw, business regulation, and land-use planning authority under the Indian Act, which they could use for environmental protection and land and resource management purposes, these provisions are antiquated, unfunded, and have penalty and enforcement provisions that are totally inadequate.[71]

This situation has given rise to an environmental regulatory gap on reserve. John Moffet, Director General of Legislative and Regulatory Affairs at Environment Canada, told the Committee that “reserve lands generally do not benefit from the full range of environmental protection that applies off reserve.”[72]

Repeatedly, the Committee heard that the penalties under the Indian Act — fines not exceeding $1,000 — for environmental violations were sufficiently weak as to be a minimal deterrent. Similarly, Chief Sharon Stinson told the Committee that:

[T]here are few federal regulations in effect to protect the environment on reserves. As a result, residents on First Nations reserves do not have the same environmental protection that other Canadians do.[73]

First Nation witnesses stressed that the sustainable economic development of their communities depends on a clean and healthy environment and that addressing the on reserve regulatory gap is considered essential to attracting investment. Commenting on the relationship between environmental regulations and economic development, Chief Maracle told the Committee:

[l]ack of clear environmental regulations on reserve could also act as a deterrent for proponents. Without clarity on what regulations apply, economic development opportunities may be missed in the confusion.[74]

Warren Johnson told the Committee that the federal approach to addressing the on reserve environmental gap has been to work with First Nations on specific areas of legislative and regulatory development.[75] He suggested that this incremental approach is time consuming and could fail to achieve the objective of ensuring that First Nations enjoy the same level of environmental protection as non‑First Nations communities. He proposed replacing the sector-by-sector approach with a single, national First Nations environmental protection act. He told the Committee that: “Given the failings of the incremental approach, it now appears time to fill the environmental gap as a comprehensive package.”[76]

On the other hand, witnesses such as Laura Edgar of the Institute on Governance cautioned that comprehensive environmental legislation may not resolve the range of environmental issues on reserve. She noted that: “Putting legislation in place is very time consuming and is not a quick fix, by any stretch, and it’s costly to actually implement a comprehensive regulatory regime.”[77] She further argued that the environmental management gap is not just about enacting a set of regulations. Rather, Ms. Edgar suggested that an effective environmental management regime must also include a number of other elements, including approvals, standards, monitoring and inspection as well as the capacity within the First Nations to do all of these things. She told the committee that:

[t]here’s no point in having regulatory regimes if the First Nations don’t have the capacity and the resources to meet those regimes because they’re immediately going to be in non-compliance. So I think the first priority has to be building the capacity for them to actually do what they need to do, now, to manage effectively. Then, further legislation in some sort of collaborative process is the best approach.[78]

This view was supported by officials from Environment Canada who also cautioned against addressing environmental challenges through the use of regulations alone. John Moffet told the Committee that: “Developing practical and properly resourced solutions is significantly more challenging than either identifying the gaps themselves or coming up with a particular regulatory solution.”[79] He added that because First Nations do not necessarily share the same challenges or priorities, they may be ill-served by uniform federal regulations.

Both Environment Canada and the Institute on Governance stressed that regulations alone are unlikely to resolve the environmental challenges on reserves. In their view, developing the capacity of First Nations to manage their environmental risks in “ways that account for their own land use and commercial and industrial development goals”[80] may be more important than regulations.

Several First Nations witnesses also highlighted the need to build and support First Nation environmental governance capacity as a key part of the solution going forward. Chief Sharon Stinson Henry stated:

The federal government needs to properly resource first nations to deal with our environmental management needs, including providing appropriate financial, technical, and other resources.[81]

Finally, the officials from the Office of the Auditor General of Canada noted that as First Nations take on more environmental responsibilities it will be critical to ensure “that expertise [and] capacity is in place so people with responsibilities can fulfil those responsibilities.”[82]

B. Alternatives to the Indian Act Land Management Regime

(i) The First Nations Land Management Act

The First Nations Land Management Act (FNLMA) removes many of the encumbrances associated with the land management provisions of the Indian Act by providing participating First Nations with a measure of control over reserve lands and resources, and by ending ministerial discretion under the Indian Act over land management decisions on reserves.[83] Lands under the FNLMA retain their status as reserve lands and therefore “cannot be sold, surrendered or expropriated for any provincial purpose.”[84]

According to witnesses, the First Nations Land Management (FMLM) regime represents a modern institutional framework to more effectively address contemporary land management issues — such as land use planning, environmental management, and zoning by-laws — than what is currently possible under the Indian Act. Chief Austin Bear noted that the tools available under the FNLM regime “are far clearer and far more productive for managing our lands and resources.”[85] Similarly, departmental officials indicated that the First Nations land management framework has proven to be a powerful tool for “modernizing” First Nations land management and unlocking the economic potential of reserve lands.[86]

Among the factors contributing to the success of the FNLMA is the provision of local decision-making authority, allowing First Nations to better move at the “speed of business.” Gordon Shanks explained:

[T]he regime created under the lands act is local. It creates local decision-making. Generally, that translates into speed, which is highly desirable in most economic instances. It provides the capacity to be nimble in terms of local circumstances. When you are operating under a national regime, such as the Indian Act, nimbleness is not something that is very common … The lands act, by virtue of putting the decision-making at the community level, really does provide some significant benefits. Communities that are using it are showing some of those.[87]

Similarly, Chief Robert Louie, Chair of the First Nations Lands Advisory Board (FNLAB), told the Committee that an independent study by KPGM Associates found that First Nations operating under the FNLM regime are able to complete land transactions significantly faster and at a lower cost than is experienced under the Indian Act system. He stated:

We are able to respond to the business at the speed of business and not wait six months or two years for decision-making with the Department of Indian Affairs. … A recent KPMG study … found that we can manage our land matters and handle land transactions better, more efficiently and at a lesser cost, than the Department of Indian Affairs people can.[88]

Although a study conducted by André Le Dressay found that the costs of completing a project on favourably situated First Nation lands were four to six times higher than they were on comparable off-reserve lands, he told the Committee that the “FNLMA could be very effective in closing that gap” and that some First Nations have used it to effectively do so.[89]

Witnesses further indicated that the FNLMA facilitates developments that may not have been possible under the Indian Act. Phillip Goulais, Director of the FNLAB and former Chief of the Nipissing First Nation (one of the original FNLMA First Nations), told the Committee that investment deals that would have taken years to conclude under the Indian Act can be done within a month under the FNLMA. By way of example, he told the Committee:

[I]n 1989 … we lost 16 opportunities for development, because it took us about two years [under the Indian Act] to formalize a relationship with a developer. Fast-forwarding to where we are today, we have business deals that are done within hours over a meeting. We can agree in principle on where we’re going. Within the month we can formalize the final instruments to move forward with.[90]

Several witnesses noted that the ability to expeditiously complete land transactions under the FNLMA in comparison with the Indian Act land management regime, such as permits and leases, is a critical feature of the regime. This was particularly important with respect to lease approvals. Under the Indian Act, leases are negotiated by the Department, on behalf of First Nations, and require ministerial approval. First Nations under the FNLMA have statutory authority to negotiate their own leases, thereby significantly reducing the time and costs associated with this type of land transaction. Chief Stinson Henry indicated that where residential leases once took her community a year or two to complete, these are now finalized within a couple of days.[91]

Not only was the FNLM regime seen as a valuable tool for supporting economic development, a number of witnesses indicated that it also helped to build the governance capacity essential for moving toward self-governance. Commenting on the FNLM regime as a step on the way to eventual self-government, Chief Louie, whose community of Westbank has gone on to sign a self-government agreement, told the Committee:

It is a stepping stone. The advantage of going through this incremental form of self-government with land management provides the first nation with the opportunity to get its feet wet, so to speak, to say that it now has the experience….

In many communities across this country the ideal situation would be to take it step by step, for obvious reasons–to get the experience, the understanding; then everything starts to flow.[92]

In this sense, the FNLM regime was characterized by some witnesses as a critical aspect of nation‑building. John Paul, Executive Director, Atlantic Policy Congress of First Nations Chiefs Secretariat, remarked that the FNLMA provides First Nations with the opportunity to develop land regimes in a manner consistent with their values and vision.[93] More broadly, Vice-Chief Jody Wilson-Raybould observed:

[L]and management and jurisdictional authority over what happens on reserve land is one aspect of overall governance that our communities want to undertake in moving from the Indian Act to full self-determination. Our communities across the country are on various parts of the continuum and want to rebuild our nations.[94]

In addition, by providing First Nations with the ability to develop comprehensive environmental laws, Gordon Shanks told the committee that the FNLMA can provide significant economic benefits to participating communities. While several witnesses acknowledged that the FNLMA allows First Nations to manage their lands more competitively, others expressed concern that the environmental obligations associated with the regime can act as a barrier to First Nations’ participation. For example, in response to a query regarding Kahnawá:ke decision not to enter the FNLMA, Debbie Morris, Associate Director of the Lands Unit, Mohawk Council of Kahnawá:ke e told the Committee:

[A]t that time there were concerns with the environmental requirements that were in there and the liabilities that would have fallen onto Kahn awake–and, of course, we didn’t have the funding to be able to carry forth what needed to be done. So that played a big role in why it was not followed up.[95]

Similarly, officials from the Office of the Auditor General of Canada observed that the potential environmental liabilities under the regime can act as a “stumbling block to entering the FNLMA,”[96] adding that as First Nations take on more responsibility, it is essential that the expertise and capacity be in place to effectively manage those responsibilities.

However, given the economic benefits of the FNLM regime, the majority of witnesses recommended that steps be taken to adequately resource it in order to support participating communities as well as to address the backlog of First Nations seeking to opt into the framework.[97]

Representatives from the Assembly of First Nations, the National Aboriginal Economic Development Board as well as the First Nations Lands Advisory Board urged parliamentarians to facilitate greater First Nations’ access to this initiative. Departmental officials advised that while as many as 80 First Nations have formally expressed an interest in entering the FNLM regime, funding limitations have constrained the number of new entrants.[98] Officials also advised that they are working with First Nations on options for changing the federal funding formula to allow for new entrants.

Finally, Chief Robert Louie emphasized that investing in the FNLM regime yields economic benefits not only for First Nations, but for neighbouring communities and businesses. “This is really an investment,” he remarked, “and it will be a tenfold return to Canada and to the communities at large.”[99]

(ii) The Proposed First Nations Property Ownership Act

Currently, under the Indian Act and the FNLM regime, neither First Nation members nor non-members can acquire a fee simple interest in reserve land. Rather, reserve lands are set aside for the use and benefit of a First Nation. Legal title to the land, however, remains with the Crown. The Committee heard evidence from Clarence T. (Manny) Jules who is spearheading an initiative with interested First Nations to create fee simple property rights on First Nations lands.

The proposed First Nations Property Ownership Act (FNPOA) is presented as a legislative alternative to both the Indian Act and First Nations Land Management regimes. Under the proposed FNPOA, legal title to reserve lands would be transferred from the Crown to First Nations. The First Nation would then have the authority to transfer freehold interest (or individual fee simple ownership rights) to individual band members, or others, if so desired. It would then be possible for First Nation individuals’ fee simple interest to be transferred, mortgaged or sold to non-Aboriginal people and be seized under realization proceedings. All interests would be registered in a new national First Nations-controlled and administered Torrens land registry system. The proposed legislation would be optional for First Nations. Regardless of who holds the fee simple interest, the underlying title or reversionary right is intended to remain with the First Nation.

According to Manny Jules, the potential benefits of the FNPOA include providing investors with tenure certainty, reducing the transaction costs associated with the Indian Act, and providing First Nation individuals with an opportunity to access financing for housing without requiring ministerial or First Nation guarantees. He told the Committee:

FNPO will make First Nation lands and individuals more productive. The legislation will reduce tenure uncertainty and investor uncertainty. It will reduce the costs associated with business transactions such as issuing a mortgage, transferring title, and securing financing. It will confirm and help implement first nation jurisdiction and enable open markets.[100]

Apart from the positive testimony provided by the leading proponents of the initiative, those First Nations witnesses who spoke directly to the FNPOA did not endorse the initiative, though almost all acknowledged the right of other First Nations to choose this alternative. Some witnesses indicated that the FNPOA would not necessarily benefit rural, remote or isolated First Nations communities where demand for First Nation land is limited. Christopher Alcantara told the Committee that:

[i]n remote areas fee simple rights aren’t going to be a solution … it will be for certain First Nations, especially those that are in locations that can benefit from the use of fee simple. So we’re talking about places where there’s demand and interest in First Nations land within the First Nation but also outside of it, especially reserves that are beside cities for instance or municipalities. This is a place where fee simple ownership could be utilized in a lot of ways.[101]

Similarly, Chief Gilbert Whiteduck of the Kitigan Zibi Anishinabeg First Nation suggested that economic development in his community had less to do with the legal status of their land than with the health of the regional economy. He remarked:

What I can say of what we’ve been able to manage in a community in developing a certain level of economic activity, from private enterprise to community enterprise, economic development on a territory is location, location, location. We are located near a town that is having a hard time because of the forestry industry downfall at this point. Whether we would be in control of our lands or not in a different way would not give us any more economic development. The area is depressed, and there are opportunities down the line.[102]

Christopher Devlin and John Gailus also suggested that the geography of most First Nations may explain the limited support to date for the initiative. Christopher Devlin observed:

For the communities that are in urban and semi-urban areas or they’re on a major highway and there’s easy transportation access, then I think the kinds of questions about ownership and property ownership become more relevant. But most first nations aren’t there, and I think that may be one reason why you’re not seeing an overwhelming number coming forward saying we want that. As my partner said, I think the ones that are blessed with a certain geographic advantage, are the ones that are rightfully driving this debate.[103]

Aside from potential geographic limitations, Regional Chief Angus Toulouse spoke of the tension between indigenous perspectives and western values with regard to land, noting that for many First Nations land is not conceived as a commodity. He told the Committee that:

The commodification of land was at one time foreign to our way of thinking and certainly goes against our traditional way of thinking … The beliefs and value system underpinning the current Canadian economic model are not necessarily shared by the indigenous peoples in this country. The system is based on private property ownership, the buying and selling of lands and amongst individuals and corporations. The idea of lands being held collectively for the benefit of a collective is an alien idea in this world view. This detachment from the land is an alien idea to the indigenous world view. Essentially, this is the core of the first nation’s land ownership and designation conflict.[104]

In addition, in allowing for the transfer and sale of freehold interests in reserve land to third parties, some witnesses expressed concern that the FNPOA could affect the integrity of the reserve land base. Chief Whiteduck told the Committee that regardless of who owns underlying title, “we don’t want to lose any more of our reserve in any which way.”[105]

While witnesses acknowledged that individual fee simple ownership could increase investor confidence and ultimately enhance economic growth in First Nations, it was suggested that sustainable economic development could occur without privatizing reserve lands.[106] National Chief of the Assembly of First Nations, Shawn A-in-chut Atleo, told the Committee that:

We have First Nations that are doing very well in unlocking their economic potential and doing so by still holding their land in common and findings ways to unleash that economic potential.[107]

Observing that many First Nations may be reluctant to opt into this legislative scheme, at least initially, Warren Johnson stressed the value of strengthening existing instruments (i.e., leases), and tools, which he argues have not been properly used, commenting that:

That’s not to say if a First Nation’s preference is to get into a fee simple arrangement they shouldn’t be doing that. My concern … is that in the current situation there are tools, with adequate resourcing and authorities, that First Nations could be using, which are satisfactory and which might be satisfactory to a large number of first nations, and certainly are satisfactory to some of the major economies in the world.[108]

Similarly, Gordon Shanks noted that although First Nations operating under the FNLMA are prohibited from selling reserve lands, “it does not appear to be a significant barrier to economic development at this time.”[109]

C. Land Management Capacity

(i) Departmental Capacity to Manage and Process Land Transactions

A number of witnesses appearing before the Committee suggested that AANDC lacks the internal resources (human and financial) to effectively and expeditiously manage reserve land transactions. They remarked that departmental capacity has not kept pace with either the complexity or increasing number of transactions conducted on First Nations’ reserve lands. Chief Clarence Louie told the Committee:

I think of British Columbia, where there are 1,500 Indian reserves; you have a staff at the INAC office you can count on one hand looking after all the leases and all the new leases in the hopper in the province of British Columbia.[110]

In terms of the volume of land transactions handled by AANDC, departmental officials told us that in the last five years the Department has negotiated about 44,000 leases, and had almost 40,000 legal land transactions registered during that same time period. This significant volume of activity is overseen and administered by approximately 200 individuals. Not surprisingly, the lands management capacity at AANDC was identified by some as representing an even greater obstacle to economic development than the Indian Act.[111]

Similarly, Warren Johnson observed that: “Today, INAC is even more the problem than the Indian Act, due to underfunding of its own operations and those of First Nations.”[112] Some witnesses suggested that because of internal capacity challenges, the Department is unable to respond to First Nations land transaction requests in a timely manner, resulting in delays having negative implications for successful economic development. John Gailus told the Committee that:

At least in terms of the Indian Act, economic development isn’t a priority for AANDC … Both human and financial resources aren’t being allocated to deal with these sorts of issues. It’s not necessarily the fault of the individuals who are there working away. They have heavy workloads. These human and financial resources need to be brought to task if First Nations’ economic development is to be successful.[113]

Chief Whiteduck described the challenges facing First Nations when attempting to process their land transactions through the Department. He indicated that:

The big difficulty has always been the bureaucracy of Indian and Northern Affairs Canada — the slowness of the machine to provide responses to questions, approvals, and that kind of thing. We’re often ready to move very quickly. It’s really the machinery. Usually what we get back is that they are overloaded and over-worked. All of these things are told to us. Then, they tell us they don’t work in trying to deal with issues in months, but are looking at issues in years. That’s very alarming. Business has to move forward. That’s one of those barriers that somehow could be quickly removed to allow communities to move forward.[114]

Leona Irons, Executive Director of the National Aboriginal Lands Managers Association suggested that as First Nations become more sophisticated in land management and as the transactions become more complex, it will require a higher level of expertise within the lands management sections of the Department. She stated:

As we ourselves raise the professional standards, our colleagues at the regional headquarters also have to be on equal ground. It seems as though they are limited as well in their funds to build capacity.[115]

Of potential concern, the Committee also heard testimony that because of the time it takes to process land transactions, some First Nations are bypassing the Department entirely, choosing not to register their land-related activities. According to Warren Johnson, a recent study of reserve land transactions found that a large proportion of these activities are not registered in the Indian lands registry or involved no federal approvals. Specifically, he indicated that approximately “80% of all individual/family allotments are done outside the Indian Act; 50% of total band leasing is unregistered; and 66% of all short-term usage of reserve lands, like for gravel pits, garbage dumps, etc., is not federally regulated.”[116] He went on to add that with “neither First Nations nor AANDC and Environment Canada having the necessary legislative authority or resources to manage reserves to a standard anywhere near comparable to that for other communities in Canada … the problem can only get worse.”[117]

The extent of the Department’s ability to properly enforce federal environmental regulations on reserve, and resulting environmental implications, was also raised by some witnesses. In testimony to the Committee, officials from the Office of the Auditor General indicated that their audit found that the Department was ill-equipped to adequately monitor and enforce federal environmental regulations on reserves. Ronnie Campbell told the Committee that:

Aboriginal Affairs and Northern Development Canada has done little to monitor and enforce compliance with the regulations that do exist. For example, while there are regulations under the Indian Act that require a permit to be issued by the department for anyone wishing to operate a landfill site on reserve lands, we found that the department has issued few permits and is not equipped to conduct inspections, monitor compliance, or enforce regulations.[118]

Similarly, Scott Vaughan, Commissioner of the Environment and Sustainable Development, advised the Committee that while the federal government was expected to have a compliance rate of 60% of inspections for regulations that are in place, the rate was only 13%.[119]

(ii) Building First Nations Land Management Capacity

According to several witnesses, as First Nations move along the land management continuum it is increasingly important to ensure that the expertise is in place to fulfil the additional responsibilities transferred to them by the federal government as well as to mitigate against any potential risks and liabilities. In her appearance before the Committee, Jody Wilson-Raybould remarked that, “economic development and opportunities will come from the establishment of good governance capabilities and capacities within our communities.”[120] In this regard, the Committee heard that training First Nations land managers is critical if communities are going to build capacity required to effectively manage their lands. According to Chief Robert Louie:

Capacity-building is a very significant issue. With the transfer of responsibility for land management to our first nations, our communities have continually requested help in building capacity in our communities. We need trained land managers in order to assist us in that decision-making authority. It is something I want to emphasize, because it’s clearly needed.[121]

Similarly, Jennifer Copegog, Chair of the Ontario Aboriginal Lands Association and Director of the National Aboriginal Lands Managers Association, told the Committee that:

You need a highly qualified individual with clearly defined and well-developed competencies who can lead their community to proceed into greater responsibility and autonomy over their lands management.[122]

In their appearance before the Committee, officials from the Office of the Auditor General noted several challenges experienced by land managers in accessing and fulfilling training requirements. It was suggested that there are barriers to land management training opportunities, including inadequate funding by AANDC for its land management training programs and the distance and time that can be required to attend training programs.

In addition to these concerns, representatives of the National Aboriginal Lands Managers Association noted that, under its program, the Department only funds one lands manager per community. According to Joe Sabattis, Chair, Atlantic Region Aboriginal Lands Association and Director, National Aboriginal Lands Managers Association:

With regard to the training itself, there’s a problem we’re having at the first nation level. We send our individuals to school, the Department of Aboriginal Affairs pays for it, and if the person dies in office, moves on, or retires, then it’s the responsibility of the band to incur the added expense of sending the next land manager to school. They have to cover their tuition, their travel, and all of their stuff, and it’s very hard on them.[123]

Training provided by the First Nations Lands Management Resource Centre for FNLMA First Nations did not appear to be similarly constrained as most courses are provided online and can be accessed by more than one individual per community.

Representatives from the Resource Centre and the National Aboriginal Lands Management Association stressed the importance of ensuring that adequate resources are available to support First Nations land management capacity. According to Ronnie Campbell, Assistant Auditor General, the “department provides too little access to training for First Nations in comparison with the land management responsibilities it is transferring to them if they operate under either of these regimes.”[124] This view appears to be shared by representatives of both organizations. Julie Pellerin suggests that for National Aboriginal Lands Management Association:

Capacity has always been an issue and always will be. We have received much more funding for our first nations, which we appreciate, but it’s still not enough to cover all the gaps within those capacities.[125]

On this issue, Dr. Graham Powell of the Resource Centre noted that Canada’s obligations under the First Nations Land Management Framework Agreement are to ensure that First Nations have the capacity to transition from the Indian Act and to develop their land codes. He stated: “If Canada doesn’t support the training and the capacity-building, then it’s not meeting its obligation under the framework.”[126]

The Committee also heard evidence concerning the importance of ensuring that First Nations have access to Geographic Information System (GIS) capacity, especially as they begin to develop comprehensive land use plans. Representatives of the Saskatchewan Aboriginal Land Technicians indicated that all 74 Saskatchewan First Nations could be trained on GIS software for about $260,000, but that financially, even that amount is challenging for them. According to Aaron Louison, Director, Chair of the Saskatchewan Aboriginal Lands Technicians:

I couldn’t find any program that would give us that kind of money to train our First Nations land managers to utilize this software. The benefits of using the software are endless. They could do a lot with that software, but financially we can’t do it. I can’t even find an organization to help us with that kind of funding for that software.[127]

Given the importance of effective land use planning for the sustainable management and economic development of reserve lands and resources, witnesses, such as the National Aboriginal Lands Managers Association, highlighted the benefits of making GIS technology and training more readily available to First Nations. Leona Irons remarked that First Nations need this kind of technology, adding that it is a “decision-making tool and a mapping tool” which provides First Nations with the “ability to see and analyse layers of information based on location.”[128] Otherwise stated, GIS capacity allows communities to first know what is on their land, thus contributing to effective land use plans.[129]

D. Reserve Expansion: The Federal Additions to Reserves Process

The process by which land is added to reserves is dealt with under the 2001 federal Additions to Reserve (ATR) Policy, which sets out acceptable grounds for expansion and procedural requirements. There are currently three policy categories under which a First Nation acquires or is entitled to receive land: legal obligations, which include legal obligations related to specific claim settlement agreements; community additions, which provide “for the addition to an existing reserve to meet land base needs related to the normal growth of a community”; and a third, catch-all category referred to as “new reserves/other policy.”[130]

According to departmental officials and First Nations witnesses, the addition of land to reserves enables First Nations to strengthen the social and economic well-being of First Nation communities, encourages investment and promotes economic development. Reserve expansion also fulfils Canada’s legal obligations to First Nations and provides additional land for much-needed housing and infrastructure. Consequently, ensuring that the reserve creation process is efficient is a matter of significant concern to First Nations.

There is widespread agreement among witnesses appearing before the Committee that the policy and associated procedures are costly, complex, cumbersome and time‑consuming. Referring to the complexity of the ATR review and approval process, Chief Angus Toulouse told the Committee:

There is just so much complication, if you will, in trying to ensure that the steps that are asked for are followed, and when you don’t have any capacity at the community level to ensure you are following every single step in the way it is supposed to be done, and if you miss a step or whatever, if you fail to recognize a step, it is just reason to send it back.[131]

The majority of First Nations witnesses were critical of the length of time it takes to add lands to reserve, noting that the process can often take several years to complete. The Committee heard of several examples where communities have been engaged in the ATR process for well over a decade. In her appearance before the Committee, Chief Marianna Couchie of Nipissing First Nation indicated that it has taken almost 17 years for the land acquired under the community’s specific land claims settlement to be converted to reserve status.[132] During this time, First Nations are required to pay property taxes on this land pending its conversion to reserve status, and can result in an unintended financial burden.

For many First Nations, ensuring that lands are converted to reserve status in a timely manner is critical to their economic development success. The longer the delays, the longer First Nations are unable to use the land to further their economic objectives. Commenting on the implications of the delays associated with the ATR process, Chief Clinton Phillips told the Committee:

[M]y community has struggled with the inability to develop our lands for economic investment because of outdated, paternalistic Canadian government policies that limit and in most cases stop economic development; for example the Addition to Reserves or ATR policy, which continually provides time-related roadblocks that can last beyond five to ten years, in some cases–years when our land remains out of our control, years when economic development cannot occur, and ultimately years when we are denied prosperity.[133]

Similarly, James Cada of the Mississauga First Nation, whose ATR took over 15 years to complete, told the Committee that his community lost approximately $850,000 in land lease opportunities and $10.5 million in stumpage revenues and forestry-related employment opportunities during that time. “In short,” he told the Committee, “the ATR process has to be more effective in order for First Nations to become more efficient in economic opportunities. If the Mississauga First Nation had experienced a speedy process, our current economic concerns would be very minimal.”[134]

Witnesses also spoke about the importance of the ATR process in opening up economic development opportunities in remote or isolated communities. Chief Clarence Louie explained that for communities constrained by their geography, the ATR process can help overcome this challenge as it allows them to purchase land that is more favourably situated for economic development. Chief Louie remarked that, for a number of First Nations, it will “be their first chance at having a business or having good property from which to start a project.”[135] Likewise, Dawn Madahbee, Co-Chair, National Aboriginal Economic Development Board, indicated that “for most First Nations in this country, it’s the first time they’re ever going to have a chance to get developed land near highways.”[136]

While all witnesses acknowledged that the process for adding lands to reserve is a lengthy one, some witnesses cautioned that the time it takes to complete an ATR may in fact be proportionate to the seriousness of the undertaking. Gordon Shanks, a former Senior Assistant Deputy Minister at AANDC, for example, advised the Committee that, in his experience, the ATR process itself was straightforward but the procedural requirements — such as title searches, environmental site assessments, environmental site remediation, surveys, negotiations with affected third parties and so on — takes considerable time and effort to complete. He stated:

My experience in the delays was that usually there wasn’t the information that was required … Very often there is a lack of communication. Sometimes the things are incredibly complicated. You have to verify all the outstanding aspects of a piece of land. Are there any liens on it? Are there any environmental problems associated with it? Who owns the mineral rights? Who has any leases on it? All those kinds of things have to be known, clarified, and agreed to. They’re often complicated …. It requires a lot of legal nit-picking to ensure that all of the right information is there. You’re taking on enormous responsibilities when you add land to a reserve, so the crown wants to be very clear.[137]

In addition, André Le Dressay suggested that because the Government of Canada assumes liability for land once it is converted to reserve status, the requirements for reserve creation and expansion will necessarily be stringent.[138]

Difficulties addressing third-party interests were also cited as a key factor delaying the ATR process. Departmental officials identified numerous challenges in this regard, including the negotiation of municipal services agreements as well as negotiations with third parties who have existing interests in the land such as easements, leases or permits. The Committee heard that these negotiations are often complex and time-consuming. As noted by John Gailus, “[i]t can take a long time to disentangle all of those interests when you are dealing with ATRs.”[139]

The lack of a dispute resolution process to assist affected parties in resolving their differences during these complex, and oftentimes highly charged, negotiations, was also identified by some witnesses as a key shortcoming of the process. As noted by departmental officials, “there are no formal dispute resolution mechanisms in place to assist parties when negotiations break down” such that “municipalities and third parties who refuse to negotiate agreements in good faith can hold up or even stop completely a reserve creation.”[140] Chief Stinson Henry observed that not only must First Nations deal with the federal government in the ATR process, but they must “also engage with local municipalities, which can create additional roadblocks.”[141]

In order to resolve some of the challenges related to the reserve expansion process, a number of witnesses recommended bringing forward national ATR legislation. It was proposed that such legislation could incorporate some of the key components of the claims settlement legislation in place in Alberta, Saskatchewan and Manitoba which has helped to expedite the extraordinary volume of ATR’s arising from Treaty Land Entitlements and specific claim agreements.

Specifically, the proposed legislation would authorize the minister, rather than the Governor in Council, to grant reserve status to lands selected for conversion. It would also enable First Nations to designate both existing and new rights and interests on “pre-reserve” lands during the reserve expansion process, thus providing a degree of protection and commercial certainty for third parties and First Nations.[142]

Currently, the Indian Act does not adequately accommodate public or private third-party interests on land that may be selected for reserve status. As a result, existing third-party interests on land that is selected for reserve expansion must be cleared prior to the land being converted to reserve status.

John Gailus explained that the ability to designate interests on pre-reserve lands could be of substantial economic benefit to First Nations as it would allow for these interests or potential development agreements to be recognized and become active the moment the lands obtain reserve status. Currently, First Nations do not have that authority. Designations can only occur on reserve lands and the process can often take two to three years, often because of the onerous double majority voting requirement. Accordingly, the ability to undertake the lengthy designation process while the ATR process is underway can substantially reduce investor uncertainty and allow First Nations to more easily capitalize on the economic potential of selected lands. Mr. Gailus observed that:

[C]ertainly if you can be doing the processes in parallel rather than sequentially, it’s going to be a way quicker process. We’ve heard about the designation process and how lengthy it can be given that there’s often a requirement for two votes rather than one, given the double majority requirements. It would make sense to have your vote prior to the land gaining reserve status and to have essentially two orders in council going forward together… I can tell you from experience that … . on third-party interests pre-reserve that then get converted into Indian Act interests post-reserve, you have two orders in council going forward in concert.[143]

Finally, other proposals advanced to expedite the ATR process included establishing service standards for AANDC and applying the ATR policy more flexibly, in particular relaxing some of the procedural requirements for “conversion-ready lands.”