09-10-14 warren johnson paper on addition to reserve inac

7/27/2019 09-10-14 Warren Johnson paper on Addition to Reserve INAC

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Working Draft

October10,2009

Additions to

Reserve

DiscussionPaper

WarrenJohnson

NewRoadStrategies


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Table of Contents

Introduction 3

Objective 4

Background 4

1. The Communal Nature of Reserve Land 5

2. Title to Reserve Lands 6

3. The Existence of the Indian Act 7

Addi tions to Reserve 10

A) ATR Policy 10

B) ATR Process 13

C) ATR Legislation 14

1. National ATR Legislation 15

2. Other Types of ATR 16

3. Surface Access 17

4. Ministerial Approval of Indian Act Sec 35 Interests 18

5. Ratification Procedures for Pre-Reserve Designations 18

6. Other Housekeeping Items. 19

Regulatory Barriers 20

1. Resource Management 20

2. Land Management and Registry 22

3. Delegation Instruments and Ratification Thresholds 23

4. Environmental Management 24

5. Band Law Making 27

Conclusion; Issues and Options 27


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Introduction

There are 584 First Nations in Canada with reserve land. This involves 3,049 reservesdistributed nationally, totalling approximately 3.4 million hectares, an area about the size ofVancouver Island. Additions to reserve resulting from specific claims and treaty land entitlementsettlements have the potential to more than double the reserve land base in Canada1. From areserve land management perspective this represents a real challenge, as INACs capacity todischarge even the federal governments basic responsibilities for reserve land managementunder the Indian Act has historically been very limited.

Moreover, The Political Agreement between the Minister of Indian Affairs and NorthernDevelopment and the National Chief of the Assembly of First Nations in Relation to SpecificClaims Reformstates that:

While the Tribunal will, under the proposed Bill, only have jurisdiction to award monetarydamages, the parties recognize the particular cultural, spiritual, social and economicsignificance to First Nations of the lands that have been lost. In situations where a FirstNation seeks to re-acquire or replace lands that were the subject of a Specific Claim, the

Minister will review with First Nations, policies and practices respecting additions toreserves with a view to ensuring that these policies and practices take into account thesituation of bands to which the release provisions of the proposed Specific Claims Tribunallegislation apply. In particular, the Minister will provide priority to additions to reserve oflands affected by the consequences of the release provisions in the legislation or to landsrequired to replace them.

The efficient and effective transfer of land and additions to reserve resulting from legalagreements; specifically Treaty Land Entitlement (TLE) and the anticipated acceleration ofspecific claims settlement agreements, has been subject to comment by the Auditor General. Assuch, this is already one of Indian and Northern Affairs Canadas key Report on Plans andPriorities (RPP) forward priorities and INAC has undertaken to review the ATR policy and

process from this perspective as well2.

Finally, on the advice of the National Aboriginal Economic Development Board, the new FederalFramework for Aboriginal Economic Development included the following among the principalbarriers to Aboriginal economic development:3

Access to Lands and Resources The resolution of land claims and faster processes foradditions to reserves are considered essential to economic progress. Governmentprocesses need to adapt to the speed of business.

The Legal and Regulatory Environment There is a pressing need to address barriers inthe Indian Act and replace outdated regulations that impede economic development and

investment, particularly on reserves.

1ThisestimatewasdoneatthetimeoftheAFN/INACJointInitiativeandATR/UrbanReserveTaskForceandis

sometenyearsold.Itwasbasedonclaimsthensettledoraccepted.ForinstancetheManitobaandSaskatchewan

TLEsallowfortheadditiontoreserveof1.7millionhectaresalone,andlessthan50%oftheclaimssubmittedto

Canadatodatehavebeensettled.Betterestimatesmaynowbeavailable.220092010ReportonPlansandPrioritiesLandsStrategicOutcome,Page23.

3FederalFrameworkforAboriginalEconomicDevelopment,Page8.


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As a result, the Framework committed that the Government of Canada will remove legislativeand regulatory barriers that deter business development and modernize land managementregimes to enhance the value of assets. 4

In simple terms, it appears that the government is committed on the one hand to speeding upthe additions to reserves (ATR) process,taking into account the situation of First Nations to

which the release provisions of the Specific Claims Tribunal Act apply, while removingregulatory barriers to economic development on reserve on the other.

Objective

This discussion paper was commissioned as an overview of issues and options relating toimproved ATR and reserve land management in Canada, to help animate discussions betweenFirst Nations and INAC in support of the above political and economic objectives. As such theviews expressed are those of the author.

While it is assumed that the immediate priority is to meet the undertakings of the PoliticalAgreement to review with First Nations the policies and practices respecting additions to

reserves (with a view to providing priority to additions to reserve of lands affected by theconsequences of the release provisions in the Tribunal Act, or to lands required to replacethem), this paper takes a broad approach to the subject. In doing so it includes a discussion ofboth ATR specific issues and Indian Act regulatory barriers/land modernization issues, given thesignificant potential overlaps which are evident between the two.

The analysis presented here is without prejudice to the either the form or potential results of thedialogue between First Nations and INAC on these issues. The political commitments noted inthe Introduction may be met through one or a series of processes; however, each should likelybe informed of the broader ramifications of the issues involved. As a result, this analysis ispresented more as a potential road map of the range of issues that may need to be consideredin any process.

It is hoped that this approach will help provide a context for not only an informed discussion ofthe specific issues, but also consideration of their potential packaging and sequencing.

Background

Generally, the characteristics most commonly thought of in relation to reserve lands are thefollowing:

reserve lands are held for the use and benefit of the respective bands for which theywere set apart5;

the aboriginal interest in reserve lands is:1. inalienable except to the Crown;2. sui generis or unique in its characteristics;3. a right to exclusive use and occupation subject to limits;4. a personal and usufructory right; and,5. communal.

the Crown holds underlying title in reserve lands; and, the default legal regime on reserve is the Indian Act (in the absence of self government).

4FederalFrameworkforAboriginalEconomicDevelopment,Page12/13.

5IndianActSection18(1)


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These characteristics then will pervade any analysis of ATR and reserve land management.Three issues appear to be common and overriding; first, the communal nature of reserve land,second, the underlying title to reserve lands and, third, the continued existence of the Indian Actitself. Dealing with each in turn:

1. The Communal Nature of Reserve Lands

Much criticism has been levelled in the recent period against the communal nature of reserveland and the lack of individual property rights on reserve. Some go so far as to call for theabandonment of the communal interest altogether, in favour of individual property holdings,calling the reserve system a failure. These criticisms ignore the modern and sophisticatedpractices in place off reserve, and throughout the world, for the creation of private (usufructory)interests in communal property and/or the regularization of traditional holdings, which werenever given a chance to work on reserve.

Indian reserve lands are held by the Government of Canada for the use and benefit of FirstNations. As a result, Indian and Northern Affairs Canada (INAC) and First Nation governments

are each responsible for managing different aspects of reserve lands and resources, with therules and regulations for managing reserve lands set out in the Indian Act. These rules areantiquated and inadequate and serious gaps are evident throughout. They do, however, providebasic direction on allotting lawful possession of reserve land to a First Nations person(Certificate of Possession), designating and leasing reserve land to a non-band member orcompany (including a First Nation corporation) for business purposes, providing land use rightsto local or other governments for projects such as roads, power lines, or pipelines, andregistering interests.

To quote the conclusions of one overview study6:

a. Customary property rights may have been adequate when reserve populations were small and

the reserves were largely isolated from the rest of society, but they are a shaky base forparticipating in a modern economy where boundaries need to be clearly defined, land may need

to be transferred from one user to another in order to realize its value, and investors require

security. Customary rights will eventually have to be formalized on many reserves.

b.Leases can work effectively to create tradable property rights.

c.In various circumstances, both leases and CPs have suffered from the uncertainty caused by the

dual decision-making power of the Department of Indian Affairs and of band councils, often

harming third parties who thought they had entered into valid agreements only to find them no

longer enforceable. Transfer of decision-making power to band authorities. may eventually

resolve such problems..

Being aware of these and other problems, we do not present private property rights as a panacea for all

the economic and social ills of native communities. Nonetheless, their intelligent application will help

many reserve residents obtain better housing and business opportunities while remaining connected to

their ancestral communities.

6FraserInstitute,PublicPolicySourcesNumber60,IndividualPropertyRightsonCanadianIndianReserves,Tom

FlanaganandChristopherAlcantara,August2002.


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2. Title to Reserve Lands:

Even setting aside questions of aboriginal title and historical treaties, the issue of Crown title toreserve lands and resources is an arcane subject with which few in Canada are familiar.

The four initial provinces (Ontario, Quebec, Nova Scotia and New Brunswick) brought title totheir lands and resources to Confederation such that the 1867 Constitution Act (Sec. 109)provides that public lands and resources belonged to the provincial governments, while thefederal government had exclusive authority (Sec. 91-24) for Indians and lands reserved forIndians. These provinces understood that they held underlying title to reserve lands andunderstood reserves to be surface only, with reversion of surface title to them in the event ofsurrender. This was confirmed in a number of subsequent court decisions7.

The result is the 1924 agreement between Ontario and Canada and similar later agreementswith BC, New Brunswick and Nova Scotia to allow for the federal government to preserve thereversionary interest in reserve lands and resources surrendered to the Crown for the benefit of

First Nations. The Ontario agreement covered all Reserve lands situated in Ontario (with specialprovisions for the Treaty 3 area) and provided that:

1) the federal government was empowered, upon a surrender by First Nations, to sell ordispose of Reserve lands surrendered and apply the proceeds for the purposes of theband;

2) if a band no longer existed, or if lands were no longer required for the use of a band, theland reverted to the Province of Ontario; and,

3) the federal government may manage reserve mineral rights, but the government revenuefrom mineral exploitation was to be shared by the federal government (for the benefit ofthe band) and the provincial government.

Meanwhile, the new Dominion had reserved title to Crown lands and resources in the rest ofCanada to itself, giving rise to the Natural Resource Transfer Acts (NRTAs) with the PrairieProvinces, which included direct reference to the Ontario agreement. Subsequent to this andthrough to the current period, individual provinces have entered into a variety of agreementswith the federal government on these issues, both province-wide and on a reserve specificbasis. While there is some danger of oversimplifying a very complex situation, especially assurface and subsurface interests may vary, the net cumulative current result of all of this,including later legislation and agreements is represented in Table 1, where major distinctionsexist with respect to:

Quebec with neither a surface (reversionary) or subsurface (administration and revenue)agreement;

Newfoundland and PEI in a similar position in the Atlantic;

BC which reserves precious metals and maintains subsurface administration on behalf ofFirst Nations; and,

The mix of mineral revenue sharing arrangements across provinces.

7SeeforinstanceSt. Catharines Milling and Lumber Co. v. R., (1887), 13 S.C.R. 577


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Table1

ReserveTitleandReversionaryInterestsbyProvinceB.

C.

Prairies

Ontario

Quebec

N.B./N.S.a)

PEI/NFLD

Underlying

titleto

Reserve

federal provincial provincial provincial federal provincial

Surrender

Reversionto

Province

no no no yes no yes

MineralTitle federalb) provincial provincial provincial provincial provincial

Subsurface

Administration

provincial federal federal provincial federal provincial

MineralRevenues

50/50

50/50

c)

fed.(FN)

d)

provincial

fed.(FN)

provincial

Notes:

a) bywayof1959agreementsforspecifiedreserves

b) Treaty8only,excludingpreciousmetals

c) forreservescreatedafter1930NRTA,beforefederal,exceptforTLEsurfaceonlyreserves.

d) bywayof1986agreement

Any initiative with respect to either ATR or regulatory barriers must then contend with thesecircumstances and the resulting geographic mix of federal, provincial and First Nation interests.That is not to say that the situation is unworkable, especially where there is a will to make it so.

Witness the effective operations of Indian Oil and Gas Canada with respect to reserve oil andgas exploitation; the successful use of ATR as part of the Marshall strategy; the tripartite PrairieTreaty Land Entitlement Agreements; and, the agreements between provinces, industry andFirst Nations facilitating resource development off reserve in traditional territories which aresubject to title claims and/or the duty to consult. Having said that, the Supreme Court hasdetermined that as long as they remain reserve lands, the federal government administers themand has exclusive legislative authority over them.8

3. The Existence of the Indian Act

There has yet to be a full and lasting reconciliation of First Nations with the rest of Canada.

Canada had the goal and expectation that its indigenous peoples would eventuallydisappear as distinct communities as a result of dying out, intermarriage, migration to citiesand cultural assimilation. Various policies were adopted to speed up this process; strippingaboriginal peoples of their lands; encouraging residential schooling of their children awayfrom their home communities; restricting the practice of traditional culture, language and

8 Derricksonv.Derrickson,[1986]1S.C.R.285,Para.21.


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religion; making cultural assimilation a condition of acquiring citizenship; and underminingtheir institutions.9

While some progress has been made since the 1969 White Paper (notably with Treaty LandEntitlement and Specific Claims, and now the Tribunal, dealing with the issue of the two thirds ofthe original reserve land base which was no longer there10, the settlement of a number ofComprehensive Claim and Self Government agreements and the Statement of Apology on

Residential Schools in 2008) as the Ipperwash Inquiry concluded, The road to reconciliationmay be long and difficult, but it is a road that all peoples, Aboriginal and non-Aboriginal mustwalk together11.

In the meantime, the majority of First Nations people remain with no modern expression of theirhistoric treaties and their reserve lands managed under the Indian Act, a colonial instrumentsustaining their political, psychological and economic isolation. In terms of land and resourcemanagement, it provides rules and regulations, in an antiquated and unfamiliar mix of Band andMinisterial authorities, on allotting lawful possession of reserve land to a First Nations person(Certificate of Possession), leasing reserve land to a non-band member or company forbusiness purposes and/or providing land use rights to local or other governments for projectssuch as roads, power lines, or pipelines, and includes regulations for the exploitation of natural

resources on reserve including timber, sand and gravel, and minerals (through surrendersand/or Ministerial permits).

As a result, both replacement interests for third parties with existing interests in land beingconverted to reserve, and new interests being granted in existing reserves to promote economicand social development, must meet its exigencies and deal with its antiquated nature andobvious failings. This complicates life for reserve additions, which must meet theserequirements in the process of transferring land to reserve status, for example by providingsatisfactory replacement interests before the reserve is created (for which there is no provisionin the Indian Act).

First Nations have long rejected any changes in the Indian Act, however pragmatic theirmotivation insisting rather on full reconciliation (witness the current call forRecognition andImplementation of First Nations Governments) - with some singular modern exceptions such asthe Kamloops amendment12. This was aimed at allowing for designations rather thansurrenders, in the light of the above title issues, and was the first time in Canadian history thatFirst Nations had led an amendment to the Indian Act.

At the same time, because of the lack of transparency, and unfamiliar and antiquated nature ofthe resulting federal/provincial First Nation relationship, there is often little understanding andmuch confusion (if not open antagonism and suspicion) with this situation in the Canadian publicand those in the local business and political communities with whom First Nations shouldotherwise be partnering. In this environment, which is too often negative and mistrustful,progress is slow and solutions are by definition second best.

The implications are that:

9EthnoculturalDiversityinaLiberalState:MakingSenseoftheCanadianModel(s),WillKymlicka,Queens,

CouchichingConference, 200710

ThisestimatewasusedbyINACincommunications leadinguptotheSpecificClaimsResolutionAct,which

passedParliamentonNovember4,2003,butwhichwasneverproclaimed.11

SydneyB.Linden,Commissioner,ReportoftheIpperwashInquiry,Volume1,Page691.12

BillC115,AnActtoAmendtheIndianAct1988,commonlyreferredtoasthe"Kamloopsamendment."


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As noted above private property rights may not be a panacea but their intelligentapplication, respecting the communal nature of reserve lands and resources and givingmodern expression to traditional practices, can do much to further First Nations socio-economic development;

the complexity of the title issues and views of the provinces will have to be accounted for

directly, and special circumstances (such as that of Quebec) examined in the context ofspecific issues (the fact that this was not done during the AFN/INAC Joint Initiativecontributed to the AFNQL withdrawing from the ATR Working Group);

the lack of complete reconciliation and understanding will limit results and imply acontinuing need for outreach, communications and education, recognizing the importantrole First Nations institutions can and are playing to build bridges; and,

First Nations natural reluctance to improve the Indian Act will frame options within thecontext of the limitations of the Act and the potential for Federal/First Nation partneringon optional and/or sectoral self-government approaches.

The more recent period has witnessed some success in work on these issues, when FirstNations interests have been respected and the work has been First Nation led/conducted in realpartnership, including;

2001 improvements in the ATR policy as part of the AFN/INAC Joint Initiative andssubsequent release of the joint AFN/INAC ATR communications toolkit.

2002 expansion of the First Nations Land Management Act to allow more individual FirstNations (a rolling 30) to opt out of the Indian Act and enter into this sectoral self-government arrangement for reserve land and resource management.

2004-2005 work with the National Aboriginal Lands Mangers Association (NALMA) toestablish the new Reserve Land and Environment Management Program (RLEMP).

2005 passage of the First Nations Commercial and Industrial Development Act, the FirstNations Oil and Gas and Money Management Act and the First Nations Fiscal andStatistical Management Act.

Early in the above process, the department adopted an approach which is reflected in the

current strategy for the Land Strategic Outcome of INAC. This strategy is focussed on:

First Nations Governance over Lands and Resources Work with interested FirstNations to develop the necessary legislative tools and intergovernmental agreements toenable individual First Nations to assume governing authority and responsibility overtheir lands, resources and environment.

Responsible Federal Stewardship Support sound horizontal federal stewardship inthose areas of responsibility remaining with the federal government including ATRs andclarification of title. During the transition to First Nations governance, the first priority isalways to invest in building First Nations institutions, capabilities and authorities,whereas ongoing risk assessment will determine where exceptional investments will berequired in strengthening federal institutions, capabilities and authorities.


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In the context of the recent political and economic commitments noted at the outset, theanalysis contained in this paper assumes that this strategy continues to have currency both withINAC and First Nations.

Addit ions to Reserve

ATR broadly covers both additions to existing reserves and the creation of new ones. It is anexercise of the Royal Prerogative through an Order in Council (OIC) 13. An OIC is a notice of anadministrative decision issued by the Governor General of Canada on the advice of Cabinet(Governor in Council GIC). In the case of ATRs this is done on the recommendation of theMinister of DIAND. The following sections provide a summary and update of issues identifiedwith respect to the ATR policy, process and legislation.

A) ATR Pol icy

The existing ATR policy was clarified in 2001 as part of the AFN/INAC Joint Initiative, to createthree categories of ATR; legal obligations, community additions and new reserves/other policyissues. The policy clarified that normal community additions and legal obligations will be given

positive recommendation (subject to site specific criteria), while new reserves or proposalsgoing beyond normal community growth requirements or legal obligations (raising other policyissues) will be restricted.

1. Legal Obligations: This category recognizes that Canada must fulfill its legal obligationsto First Nations and will normally recommend reserve status for ATR proposals in thiscategory. It addresses proposals that seek reserve status for land based on:

a) specific claim settlement agreements which include ATR;b) court orders; or,c) legal reversions of former reserve land.

Unless there is legal obligation to grant reserve status to a particular parcel of land, andsubject to the land selection specifics of the settlement agreement, the site specific

criteria of the ATR policy must be satisfied.

2. Community Additions: This category recognizes that there is a class of routine proposalsseeking the addition of land to an existing reserve community (as opposed to theestablishment of a new reserve) based on:

a) normal growth requirements of the reserve community;b) natural geographic enhancements of the existing reserve landbase; or,c) returns of unsold surrendered land to the existing reserve land base,

where INAC will normally recommend reserve status (subject to site specific criteria).

3. New Reserves / Other Policy: This category covers all proposals which are not LegalObligations or normal Community Additions proposals and where the policy is highlyrestrictive. The types of proposals covered under this category include:

a) the establishment of new reserves for social (e.g., residential, institutional) or commercial purposes, resulting from provincial land offerings,

13In Canada, the royal prerogative refers to the rights, powers and privileges exercised by the Crown,

usually the Governor General of Canada - canadaonline.about.com


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resulting from unsold surrendered land not within the service area of anexisting reserve community,

for landless bands/communities, or to relocate existing bands/communities outside existing reserve

boundaries;b) additions to reserves or new reserve proposals resulting from legal obligations,

(e.g., claims settlement agreements) where the proposal goes beyond thecommitment in the relevant legal agreement (e.g., in terms of funding, landselection etc.); or,c) community addition proposals with unresolved questions of community need,funding source, etc.

The site specific criteria referred to above include the need: to consult/respect the treatyand aboriginal rights of other First Nations that may be affected; for local consultationsand (where relevant) negotiations (e.g.: land use, zoning, tax loss etc); to undertakeenvironmental assessments; and, for good title and respect for existing third partyinterests.

This then is the context for the federal governments commitment to review the ATR policy withFirst Nations - in order to give priority to potential ATRs resulting from lands purchased as aresult of a Tribunal decision. Since Tribunal decisions do not create legal obligations for ATRand since such ATRs could not be categorized as intended to meet normal community growthrequirements, it is likely that this would necessitate the creation of a new policy category,potentially along the following lines:

Tribunal Decisions: This category would cover ATR proposals resulting from landspurchased with compensation flowing from Tribunal decisions:

a) where s.21(1) of the Act applies for an unlawful disposition of all of theinterests or rights of a claimant in or to land and the interests or rights havenever been restored to the claimant, then all of the claimants interests in and

rights to the land are released; or,b) where the Tribunal decision is based on Canadas breaching a lawful

obligation to provide reserve lands.

The two categories in a) and b) above appear to cover the areas in the Tribunal legislationspecific to the desire to re-acquire or replace lands that were the subject of a Specific Claim.

Given the undertaking in the Political Agreement to provide priority to additions to reserve oflands affected by the consequences of the release provisions in the legislation or to landsrequired to replace them, then it seems useful to define this class of ATR as a priority category,where INAC will normally recommend reserve status subject to site specific criteria and theneed to agree on a policy respecting quantum and selection area criteria for this category of

ATR (as discussed in Annex A).

A second ATR policy issue, which has arisen since the last AFN/INAC Joint Review, is the needto agree on the definition of the concept of service area for existing reserves. As noted above,

ATR proposals which are not legal obligations but are within the service area of an existingreserve can be processed much more expeditiously and are more likely to be accepted thanthose which are outside that area since the latter effectively result in the creation of newreserves, with potential for significant incremental funding requirements. Moreover this concept


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of service area is also used by the specific claims land selection policy and will have an impacton the approach to Tribunal decisions giving rise to ATRs.

While the concept of service area (within which local schooling and other social, economic andinstitutional infrastructure could be shared) would appear relatively straight forward, it is claimedthat regional offices of INAC have had some difficulty with it, to the extent that some regions

define this as anywhere within the province, while others define it as contiguous to the existingreserve (both of which are inconsistent with the policy intent). There may well be acommunications if not a policy issue here which should be examined at an early stage.

A third area, which has been subject to recurring ATR discussion, surrounds the issue ofeconomic reserves. This issue originally arose in the context of requests for the creation ofnew reserves or additions to existing reserves for economic purposes. Since the Indian Act taxexemption is not seen by the federal government as an economic development incentive,economic reserves were seen to create a potentially unfair tax advantage, despite the limitedreal tax benefit involved.

This issue then came forward again when First Nations and the federal and provincial

governments used TLE and other claims settlements in the Prairies to allow reserve landselections anywhere in the province and/or in urban areas, resulting in a variety of urban andother economic and commercial reserve proposals in the mid 1990s. Because of the spill overlocal economic benefits that was seen to flow from these ventures and the resulting support ofboth provincial and municipal leaders in Saskatchewan (and later in Manitoba) this strategy metwith some success. This precedent then created pressure on INAC regions to liberalize the landselection area for other types of ATR (especially for economic purposes). This was directlyconsidered as part of the 2001 improvements in the ATR policy done under the AFN/INAC JointInitiative, resulting in;

1 the explicit inclusion of economic development as one of the legitimate normalcommunity growth requirements for additions (as opposed to new reserves) which

would be positively considered in the context of the new policy and2 the use of the concept of service area for additions to existing reserves to allow more

flexibility in land selection for community additions,

although it now appears that there may be some confusion on this point (specifically or inrelation to the definition of service area noted above) and some clarification is likely required.

The final ATR policy area which has been identified from early exercises is the difficulty causedby the lack of an ability to formally define different types of reserves. Under the Indian Act andthe ATR policy a reserve is a reserve is a reserve. As a result, the federal government hashistorically been very cautious in the ATR process, on the basis that any ATR can be used forresidential purposes and could result in demands for infrastructure and programming, which

might raise significant cost issues especially if the addition where to be located outside theservice area of an existing reserve.

An ability to define a reserve as other than for residential purposes might obviate this problemwhere there was an interest in promoting other types of reserve. This has been used in SpecificClaim settlements to allow for a wider land selection area, with the legal undertaking that thenew reserve land not be used for residential purposes included in the settlement agreementitself. Consistent with this, there was also some discussion in the AFN/INAC Joint Initiative ofthe use of ATR to create non-residential reserves within traditional areas, to protect land that


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had special cultural, spiritual and social significance to First Nations, especially in the light ofgrowing resource developments in historical treaty areas, but this issue was never pursuedfurther.

B) ATR Process

The work of the AFN/INAC Joint Initiative resulted in a number of process improvements andnew operational targets for processing all ATRs which the department had difficulty achieving.Subsequent concerns over backlogs in TLE ATRs were documented by the Auditor General.This finally resulted in a strong Ministerial commitment and enhanced resourcing, such that theDepartment has been able to convert over 315,000 acres to reserve status in the provinces ofSaskatchewan and Manitoba since 2005, representing a 42 percent increase in landconversions in just three years.14

More intensive process improvement work has been undertaken recently, as outlined to theCommons Committee on Aboriginal Affairs and Northern Development on April 28, 200915:

We are poised to roll out a national additions to reserve tracking system, known asNATS, in the current fiscal year. NATS will greatly enhance the department's ability toplan and manage human resources and the various expenditures involved in the ATRprocess, such as for surveys and environmental assessments. The system will alsoaddress the data integrity issues the Auditor General expressed concern about, and itwill provide for the consistent file structure the Auditor General recommended.

In addition, the entire ATR process has been mapped in detail to identify options tocombine or eliminate steps and to gain any efficiencies that may be possible. At thebeginning of the 2008-09 fiscal year, a service standard of 100 business days wasestablished for phase three of the ATR process, the final stage undertaken inheadquarters. Whereas there was some initial difficulty meeting the standard in the first

quarter, it was met in the final three quarters and, on average, for the entire year. Through discussions with regional officials and first nations, it became clear that one of

the main difficulties in increasing the processing times is the lack of definition andstructure around the front end of the ATR processor phase onethat is, the part inwhich first nations select provincial crown land or acquire fee simple land they would likeadded to their reserve. To overcome this difficulty, the department partnered with theNational Aboriginal Lands Managers Association, or NALMA, to talk to first nation anddepartmental practitioners across the country and to develop an approach to assist firstnations with phase one. NALMA has recently recommended that first nations take adiligent buyer approach to land selection and acquisition and has produced a draftmanual based on this approach, which will be finalized in the next few months and bedistributed widely to first nations. We believe this will further decrease processing times

and enable service standards to be established for phase two, which is the work theregional offices undertake.

14OpeningStatementtotheStandingCommitteeonAboriginalAffairsandNorthernDevelopment,TreatyLandEntitlementObligationsIndianandNorthernAffairsCanada,April2009,SheilaFraserFCA,AuditorGeneralofCanada.15

SaraFilbee,AssistantDeputyMinister,LandsandEconomicDevelopment,DepartmentofIndianAffairsand

NorthernDevelopment.


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Given the imminent release of the new ATR Toolkit for First Nations, the rest of this analysis of

ATR focuses on potential legislative issues.

C) ATR Legislation

It was noted at the outset that ATR is an exercise in the Royal Prerogative, and as such issubject to policy discretion but not legislative oversight. However, at about the same time as the

AFN/INAC Joint Review was working on the ATR policy clarification, optional claimsimplementation legislation was being put in place in Alberta, Saskatchewan and Manitoba16 tohelp expedite the extraordinary volume of ATRs arising from TLE and Specific Claim

Agreements. These two acts provide tools that significantly accelerate the ATR process andprovide additional certainly to third party interests during the process. This legislation providesthat, at the request of the relevant First Nation, ATR in those provinces flowing from claimsagreements could be subject to:

Ministerial approval rather than requiring an OIC process; a pre-reserve designation vote to facilitate replacement of third party interests; and, the Minister issuing temporary permits recognizing existing third party interests.

According to INAC, reserves created in accordance with the Royal Prerogative on averagerequire another 6 to 12 months of additional processing (for OIC, designation votes, issuingreplacement interests etc). 55% of the 250 ATRs arising from the Prairie settlements since2006 was processed in accordance with this legislation. However, all of the ATRs currently onthe DIAND Manitoba TLE Year Two and Year Three Dashboard andmost of the ATRs beingprocessed in Saskatchewan are now proceeding in accordance with the legislation.

Table 2

Addi tions to ReserveBy Policy Category by Region

2006-2009*

Region LegalObligations CommunityAdditions NewReserveOtherPolicy Total

Atlantic 4 16 1 21

Quebec 0 6 0 6

Ontario 4 3 0 7

Manitoba** 77 0 0 77

Saskatchewan**

165 0 0 165

Alberta

**

5

3

0

8

BritishColumbia 0 12 0 12

NorthWestTerritories 2 0 0 2

Yukon 0 1 0 1

16SeeClaimSettlements(AlbertaandSaskatchewan)ImplementationAct,2002,andManitobaClaimSettlements

ImplementationAct,2000.


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Total 257 41 1 299* as of July 1, 2009** 55% of ATRs approved by Minister of INACSource: Analysis and Financial Planning Directorate, Additions to Reserve Directorate.

As can be seen from Table 2, most of the current ATR work relates to implementation of TLE inSaskatchewan and Manitoba. However, as noted above, it is expected that specific claimsettlements from across the country resulting from the Justice At Last initiative will be anincreasing proportion of the ATR business. While all ATRs stand to benefit from the work onprocess improvements, nothing comparable to the Claims Implementation legislation isavailable in other provinces and territories and other types of ATR (including those resultingfrom Tribunal decisions) are excluded from the application of this legislation, even in thePrairies.

Continued pressures on the TLE process in the Prairies, and experience with the ATR processnationally are revealing other impediments to efficient reserve additions which would also affectTribunal decision ATRs and which might also benefit from policy and/or legislativeimprovement. Many of these issues are directly connected with gaps and historical

idiosyncrasies in the Indian Act reserve land regulatory environment (discussed in more detail inthe next section) which are independently becoming apparent as obstacles to economicdevelopment.

While other issues may arise in discussion with the AFN, in a canvass of regional officials ofDIAND responsible for the ATR process, the following potential legislative issues emerged:

1. the need for national ATR legislation.

2. the need for ATR legislation to address more than just than Legal Obligations flowingfrom claims agreements.

3. the ability to have Ministerial rather than GIC approval of Indian Act Section 35 (LandTaken for Public Purposes) easements/interests in land to be converted to reserve.

4. the potential to have a different ratification procedure for pre-reserve designations.

5. the need for ATR legislation to provide for some dispute resolution mechanism toprovide certainty in situations where surface access provisions for pre-existing third partyinterests are to be defined after reserve creation (e.g.: sub surface mineraldevelopment).

6. other housekeeping items.

Each of these is then discussed in turn:

1. National ATR Legislation

There is no apparent rationale for restricting legislative improvements to the processing of

ATRs to the three prairie provinces, other than that at the time of the legislation this is wherethe vast majority of ATRs were arising and that as a result of the TLE and Claims process thesethree provinces had become politically engaged. Having said that, there is evidence of thespecific claims business broadening out nationally. Additionally, the Maritimes have becomemore sensitized post Marshall, with significant ATR activity as indicated in Table 2, as hasOntario (especially post Ipperwash).

The situation in PEI, Newfoundland and Quebec appears more complicated as thesejurisdictions have no title reversion/subsurface agreements in place, such that they may raise


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concerns with any proposed legislation and/or it may be seen to be inoperative (even ignoringthe bijuralism issue in Quebec). More work is required here. On the other hand, the objective ofthe legislation presumably would be to expedite ATRs that would normally be approved. On thisbasis it is hard to see what grounds any province would have to raise concerns, given adequateconsultations.

2. Other Types of ATR

Under the ATR policy there are legal obligations other than provisions of first nations claimsettlements, which relate to the creation of reserves or the addition of land to existingreserves17, which could be facilitated by legislation. These include court orders as well as legalreversions of former reserve land.

In addition, if the ATR policy category of normal Community Additions is also an area wherethe Minister will recommend reserve status (subject to site specific criteria); and given that thereis no recent record of the GIC ever having overruled a Ministerial proposal for an ATR (or thatan ATR approved by the Minister created any subsequent difficulties), then it is not clear whyone would not include this category in facilitating legislation as well. Questions have also been

raised over reserves which (for some historical reason) have never been subject to OIC, butwhich are publically understood to be reserves.

Finally, we have the potential new category of ATRs arising from Claims Tribunal decisionswhich, while not legal obligations per se, have already received a federal commitment that theywill be given priority.

If all these categories were included in a new legislative package, then (subject to request bythe First Nation and to meeting the relevant site specific criteria) the following would benefit fromthe more certain and accelerated provisions of ATR legislation:

claims settlements which include ATR commitments. court orders.

reversions of former reserve land. re-acquiring or replacing lands subject to Claims Tribunal decisions. existing reserves which were never subject to OIC. natural geographic enhancements of the existing reserve land base. returns of unsold surrendered land to the existing reserve land base. normal growth requirements of the reserve community.

These all comprise categories of ATR where the existing policy is for the Minister to recommendOICs. One might then ask why not all ATRs? While this issue is worthy of further analysis anddiscussion, any other type of ATR is seen as exceptional and the norm would be for the Ministernot to make a recommendation. In fact, only one such recommendation has been made since2006, according to Table 2. As a result, there is some basis for excluding those ATRs in the

New Reserve Other Policy category which only exceptionally might achieve a Ministerialrecommendation.

Some parliamentarians and members of the public might take comfort that the Minister does nothave complete discretion and there is the appearance of GIC oversight for exceptional

17Introduction ClaimSettlements(AlbertaandSaskatchewan)Implementation Act,2002


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proposals, even if in practice these are infrequent and rarely if ever overturned. These ATRsare often subject to Cabinet approval in any event since they presumably involve new bandand/or reserve creations and/or relocations with significant incremental funding requirements.This might also avoid a problem that could arise in drafting legislation for all ATRs, whereparliamentarians might then look to define the whole ATR policy in legislation. On the otherhand, much of the ATR policy would be implicitly defined in legislation if all of the above

referenced categories were listed.

Additional considerations arise in that for some First Nations the GIC is seen symbolically as theCrown, while the Minister is seen as representing a political party and the government of theday. This is one reason put forward for why not all First Nations opt to use the existing claimsimplementation legislation and why the legislation is optional a practice which should likely befollowed for any new legislation.

3. Surface Access

In the 1980s the decision was made to allow surface only reserves to facilitate the settlement ofspecific claims and treaty land entitlements in the Prairies, since this would allow the selectionof lands which already contained subsurface interests under provincial authority and/or wherethe value of the subsurface resources might inhibit a First Nations ability to acquire theproperty. This created the difficulty of guaranteeing, prior to the ATR, future surface access for athird party that might already have mineral rights in relation to the selected property, when theonly legislative means of doing so is through a surrender under the Indian Act subsequent to the

ATR. While at that time the decision was made to utilize a contractual remedy through theFederal Real Property Act, the Saskatchewan Treaty Land Entitlement Agreement appears toacknowledge some concern with this approach, as evidenced by the text of Article 5.05(b):

Subject to applicable federal legislation, the provisions of section 5.05 (contractualapproach) shall no longer be applicable if Canada enacts legislation to provide formechanisms which ensure surface access to a Fee Simple Mineral Owner or a MineralDisposition Holder in respect of Entitlement Reserves on terms and conditions similar to

those contained in The Surface Rights Acquisition and Compensation Act, R.S.S. 1978, c.S-65

Over the years the Government of Saskatchewan has pressed Canada to legislate in this area.A surface access dispute resolution mechanism (DRM) was dropped from the legislativedrafting instructions for the Claims Implementation legislation on the basis that:

unlike the three mechanisms that work only up to reserve creation, it would apply after; a surface access (or lands) third party DRM is potentially relevant to more than just

surface only claims ATRs; and, more research and consultation was required on DRM options, including an examination

of that used by Indian Oil and Gas Canada (IOGC).

It is not clear why the IOGC approach was referenced in that discussion, as it does not appear alikely avenue to pursue. IOGC is in the business of regulating the exploitation of First Nation oiland gas resources where there is a contractual relationship between the First Nation and the oiland gas company, and the First Nation has a real monetary interest (it is both the surface andsubsurface owner). The surface access issue outlined above is a completely different context,more like the classic provincial surface access issue. The surface owner (First Nation) has nointerest in the sub surface and no incentive to provide access to the third party which holds thesubsurface interest issued by the province. A closer model might be the (joint) surface access


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boards established under modern treaties in the North (Nunavut Surface Rights Tribunal forinstance) or the DRMs called for under FNLMA.

The passage of the Claims Implementation Legislation removed some of this pressure,specifically with respect to existing mineral interests where the surface access requirement waspre-defined and could be dealt with by the pre-reserve designation provisions of the new

legislation. The question, however, remains with respect to disputes which would occursubsequently (where the access provisions were not definable prior to ATR or were subject tochange). Unfortunately, the analysis outlined above remains to be done and work should becommissioned on this subject.

One option which could be considered would be to adapt the existing provincial regimes, forexample using province specific generic FNCIDA regulations which individual First Nationscould opt in to, so as not to be seen to be providing for provincial jurisdictional intrusion onreserve. Some customization of the provincial regime would then be possible to provide for FirstNation Board members and the consideration of First Nation socio-cultural issues by the Board.Presumably there is some incentive for provincial cooperation since the end result is to theirbenefit.

4. Ministerial Approval of Indian Act Sec. 35 Interests

Even in the Prairie Provinces, when a pre-existing easement on prospective reserve land mustbe replaced with an Indian Act Section 35 interest, there is currently a requirement to have thisapproval made by the Governor in Council (GIC), even though the reserve creation can beapproved by the Minister. This is dictated by the wording of Section 35, which refers directly toGIC approval.

Where the First Nation selects/purchases land with an existing public purpose easement on it, itis aware that this is a condition of the ATR. To take the approval to the GIC when the Ministercan approve the ATR itself appears a completely unnecessary additional step. Correcting thiswould, however, require legislation.

5. Ratification Procedures for Pre-Reserve Designations

For lands to be designated for leasing or absolutely surrendered to the Crown for metallicminerals and oil and gas exploitation, there must be a surrender (as in the surface access issuediscussed above) assented to by a majority of the band by way of referendum or meeting. Asthe Supreme Court decision in Corbiere pointed out, off reserve members cannot be excludedfrom such process as they share ownership in the assets of the nation. With the large numberof First Nations members living off reserve and the constant flux of eligible voters moving backand forth between reserves and urban centres, it has become more and more difficult to achievea majority of all members for ratification.

In addition, this is already a very high threshold, of the type reserved in other jurisdictions forconstitutional issues. 58.8% of eligible voters voted in the last federal election. If this was a FirstNation surrender vote, then 85% of those voting would have had to vote in favour. This is athreshold few governments could operate with. As a result, as a matter of policy, DIAND andFirst Nations have already moved to other thresholds, more consistent with modern electoralpractices elsewhere, to achieve community consent for activities not covered by the Indian Act.These include ratification of claims settlements and negotiated agreements and opt in


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provisions for Indian Act alternative/sectoral self-government legislation such as FNLMA,FNOGMMA etc. The accepted practice has become that:

a majority of eligible voters must participate; a majority of those participating must vote affirmatively; and, more than 25% of all eligible voters must vote affirmatively.

Since this policy was not in place when the Claims Settlements Implementation Acts were beingdrafted it is not reflected in that legislation, such that pre-reserve designations to facilitate thereplacement of existing third party interests still must meet the exigencies of the Indian Actsurrender procedures. This is clearly a difficult and costly process for First Nations to go throughand could also be prejudicing First Nations choices of lands. Since the ratification policy outlinedabove is already accepted practice and has been put forward by INAC, Justice and FirstNations, and accepted by parliamentarians, in a variety of pieces of recent federal First Nationlegislation, there appears no reason not to consider such an approach in any new ATRlegislation, specifically with respect to pre-reserve designation/surrender votes.

6. Other Housekeeping Items

If there is to be a legislative package on ATRs involving the transfer of OIC authority to theMinister, then there is an opportunity to include other related housekeeping issues by way ofclean-up, notably for items that are not contentious and might not otherwise warrant suchattention.

One item which has been brought forward is the issue of reserve name changes. DIANDspractice has been to accept BCRs for reserve name changes and to register such changes inthe Indian Lands Registry. Justice has been concerned for some time with this practice asleases, permits and designations which refer to a reserve under a changed name could bechallenged as void if that name change was later found not to be legally effective. The concernhere is that since reserves are created (and named) through an exercise of the RoyalPrerogative, then name changes must also be done under authority of that same prerogative ifthey are to be legally effective.

If a legislative package is to be considered to facilitate ATRs, dealing inter alia with OICauthorities and other issues improving the economic regulatory environment, then this issuecould be dealt with by providing the Minister with this OIC authority.

In this context it might be useful to consider whether the same authority could be transferred tothe Minister for the naming of Bands. The salient part of Section 2(1) of the Indian Act defines aband as a body of Indians declared by the Governor in Council to be a band18. Analogous tothe practice of accepting BCRs for reserve name changes, BCRs are also accepted for bandname changes and OICs are only employed where bands are named in legislation (as in theannexes to the recent suite of First Nations legislation FNLMA, FNCIDA, FNOGGMA,FNFSM). The same question of legal prudence and security for economic developmentpurposes may be relevant here.

A complicating factor is that any ATR legislation is likely to be optional or opt in legislationwhereas the above two issues should apply to all name changes. This is an issue to beconsidered in the context of consultations. While this is an issue that may not raise politicalconcerns for First Nations, it is also one which could also be considered if there was to be

18BradfordW.Morris,ProvidingLandsandResourcesforAboriginalPeoples,InstituteofIntergovernmental

Relations,QueensUniversity,1987.


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support for a broader regulatory package which went beyond the above legislative issuesrelated to ATR.

Regulatory Barriers

Two distinct areas have been identified by First Nations and Canada for improvement in reserveland management:

- Additions to Reserve, involving speeding up the process to achieve reserve creation,and the creation of economic ready reserves (not needing months or years ofregulatory clean up afterwards); and,

- Regulatory Barriers, involving removing Indian Act (and potentially other) regulatorybarriers to effective land and resource management on reserve and facilitating

economic development.

While the first is a commitment in both the INAC Report on Plans and Priorities and the PoliticalAgreement between the Minister of Indian Affairs and Northern Development and the NationalChief of the Assembly of First Nations in Relation to Specific Claims Reform, both arereferenced as priorities under the new Aboriginal Economic Development Framework and, asnoted in a number of sections above, many issues are either common or represent overlapsbetween the two. Since both involve potential legislative and regulatory initiatives and both areto be subject to work in partnership with First Nations, there may be a variety of process andlegislative packaging options available.

To facilitate the analysis of regulatory barriers, and the need for joint work with First Nations on

their potential legislative implications and relationship to ATR issues, the following overviews thefairly extensive analysis on Indian Act regulatory impediments which already exists (flowing fromthe work of the Auditor General, work on Smart Regulations and numerous First Nation andinterdepartmental consultative exercises since the launch of the original Canadian AboriginalEconomic Development Strategy in 1989). As such it is very much an overview of topics and,while there is some danger in oversimplifying, it is hoped the essential features are adequatelymapped to allow for their relationship (in substance and in packaging) to the previous analysison ATR to be clear. For convenience the analysis is broken down into the following categories:

- Resource Management- Land Management and Registration- Delegation Instruments and Ratification Thresholds

- Environmental Management- Band Law Making

1. Resource Management

The recent period of quickly evolving jurisprudence on aboriginal rights, title and treatiescoincides with the period in which resource and infrastructure developments in Canada havebecome relatively more significant features of the Canadian economic landscape. They havealso been moving further afield into less and less accessible areas (NWT diamonds; Alberta tar


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sands; Voiseys Bay nickel, copper and cobalt; Manitoba hydro; Arctic ports, etc.) involving thetaking up of land in aboriginal traditional territories subject to treaty and/or subject to new oroutstanding claims. The result has been an explosion in the use of interim measures and impactbenefit agreements (IBAs) between First Nations and the resource sector in Canada to facilitatethe opening up of new projects in both historic treaty and land claim areas, despite the fact thatonly the Inuit land claims agreements contain formal IBA requirements.

In addition, the resource sector in Canada appears to have figured out that, much like in thewest and the north (if not the whole of) Canada, their future economic potential may in large partbe determined by how well they partner in terms of aboriginal community and labour marketrelations. To use the mining industry as an example, some 1200 Aboriginal communities arelocated within 200 kilometres of 190 principal producing mines and 1900 active mineralexploration projects. Moreover, in the last two decades there have been virtually no new miningcommunities constructed to accompany new mine projects in Canada. In this context, themining industry has identified a looming human resources gap over the next ten years.

Growth in the industry, coupled with an aging and retiring Canadian workforce, is estimated toresult in a shortage of some 92,000 workers. The relatively younger underemployed Aboriginal

population and its often geographic proximity to principal producing and active explorationproperties are increasingly recognized as important potential solutions to addressing thisgrowing gap. Couple this with the ability for First Nations to strategically select lands as a resultof claims settlements and there is a growing interest in on reserve resource developments.Major resource developments on reserve (mining, oil and gas, forestry, non-metallic minerals,sand and gravel) require surrender of the resource to be exploited to the Crown (oil and gas,minerals) and/or the long-term designation and leasing of land for the surface facilities (sandand gravel). Smaller scale developments (forestry, non-metallic minerals) may be exploited byMinisterial permit (Table 3).

Table 3Indian Act Resource Authorit ies

Timber, Non-Metallic Substances:Sec 58(4) (b) Permit exploitation without an absolute surrender or designation.Sec 53(1) Lease with a designation for more permanent surface facilities.

Timber. Mines and MineralsSec 57(a) Timber on surrendered land or with band consent.Sec 57(c) Disposition of surrendered mines and minerals.

When the federal government became concerned with the scale of oil and gas developments onreserve, and the need to more properly manage its fiduciary obligations under the Indian Act inthe 1970s, it put in place the Indian Oil and Gas Act and established Indian Oil and Gas

Canada (IOGC). Revisions to the Indian Oil and Gas Act (IOGA) received Royal Assent on May14, 2009 in order to support the third set of revisions to the original IOGA regulations, which arecurrently under development. The mining and forestry regulations under Indian Act Section 57have never been revised. From a variety of perspectives these regulations have long been seento be inadequate: their lack of enforceability; the minimal scale of fines/penalties; they aremissing many of the elements expected of modern resource management regimes, etc. Inaddition, modern standards appear to require a more fulsome legislative base for regulations ofthis type than is provided for by the Indian Act witness the current need to update the moresubstantive and recent Indian Oil and Gas Act prior to modernizing its regulations.


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If there is concern with potential resource developments on reserve, and the Indian Act isunderstood to be an insufficient legislative base for modern regulation which cannot be changed(see earlier Background section) then there are two options, unless the First Nation in questionis already self governing or can employ the First Nations Land Management Act:

1. develop new federal sectoral legislation and institutional capacity as with IOGC andthe Indian Oil and Gas Act; or,

2. use the First Nations Commercial and Industrial Development Act (FNCIDA) toreferentially incorporate the relevant provincial regime, subject to agreementbetween the First Nation and province.

At the moment there are no producing mines on reserve. There is one major quarryingoperation and seven recent exploration permits (diamonds, potash and uranium in Alberta andSaskatchewan). Since the scale of mining activity does not appear to be such as to warrant theinvestment in the development of a standalone federal regulatory regime, then FNCIDAbecomes the obvious choice. This was in fact its stated purpose: Whereas existing Acts ofParliament do not provide sufficient authority for Canada or first nations to establish such

regimes.

While this approach may make sense for larger projects, it is likely not practical for smaller scaleactivities in forestry, sand and gravel, etc. which do not require a surrender of the resource.Standard practice has been to reference provincial standards in a lease, but this carries the riskof relying on contractual remedies. It has often been pointed out that it would be much moreeffective to have these more local projects (those that do not require surrender) regulated locallyby the First Nation though improvement in the band law making powers under the Indian Act(see later section on Law Making).

2. Land Management and Registry

As noted earlier, initiatives to improve the regulation, administration and registration of privateinterests (traditional holdings, CPs and Leases) in First Nations communal land held under theIndian Act can have significant social (e.g. housing) and economic benefits for First Nations.Sectoral self government instruments such as FNLMA can be extremely useful in this regard.However not all First Nations can justify that level of effort and expense, nor may they have thenecessary community support for opting out of the Indian Act and into FNLMA orcomprehensive self-government. To date there are 44 First Nations exercising self governmentauthority, FNLMA or comprehensive, over their lands.

For the majority of First Nations now under the Indian Act for land management purposes,leasing may provide some early gains if improvements can be made in the designation anddelegation processes (see later sections). The problem with C.P.s appears to run somewhat

deeper, with: concerns over the experience of some reserves, where a few individuals have been

seen to take control of much of the reserve landholding; problems with the fractionation of individual holdings as a result of the INAC estate

process, which has effectively tied up land holdings in a number of other reserves andprevented those First Nations from assuming self government authority;

lack of a well understood (or any) regulatory environment for the administration andmanagement of C.P.s, other than what has been read in by the courts; and,


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recurring issues of unregulated (by either the First Nation or Canada) CP commercialactivities,

such that further research is likely required here.

This discussion does however put the focus on the adequacy of the Indian land registry tosupport any improvement in the creation and administration of individual interests in reserve

land. The difficulty is that:

the Indian Lands Registry is a simple repository of information on property interests inreserve lands and provides no legal certainty as to title19;

its IT infrastructure is antiquated and it is difficult to access; it is incomplete (i.e. it does not include information on all reserve land parcels) and is not

underpinned by a well developed legislative base; and, it appears the existing registry information is suspect and surveys are missing or

inadequate.

The evidence can be found in the significant efforts required to clean up survey, mapping andtitle information on reserve lands so that they can move from the Indian Act (where the federal

government is responsible) to FNLMA (where the responsibility and liability shifts to the FirstNation). As populations grow, more and more land is added to reserve to operate within theregistry and local infrastructure and economic investments multiply, these problems of the landsregistry [encompassing a registry of interests vs. title and the lack of quality control of theinformation in it] can only multiply.

Expansion of FNLMA and funding to clean up the survey and registry system have beenpriorities for both DIAND and First Nations for a number of years. In addition First Nations havebeen examining a number of approaches to improvement in the registry and title system andproposals may be brought forward here as well. As a result these issues are not furtherdeveloped here, however, there importance in combination with and/or to support and underpinthe other regulatory issues discussed here, should not be underestimated.

3. Delegation Instruments and Ratification Thresholds

Earlier sections raised the issue of the Indian Acts outdated ratification procedures forsurrenders and designations and their implications for pre-reserve designations, resourceprojects on reserve and leasing of land for commercial purposes. The requirement for a vote ofthe majority of members/electors (often with a large component living off reserve) is arequirement few if any other governments could achieve on most matters put before theircitizens. The section on ATRs raised the issue of providing for a provision in legislation for amore reasonable (majority of those voting minimum 25% of members) threshold for pre-reserve designations.

One growing trend is for First Nations to designate the whole or major parts of their reserve forcertain purposes, and do a head lease to a band owned company who would sub-lease andmanage the lands according to the terms (land use plan) of the band. This is one way ofaddressing some of the issues raised with respect to Land Management raised earlier, at least

19Incontrast,Torrenstitleisasystemoflandtitlewherearegisteroflandholdingsmaintainedbythestate

guaranteesanindefeasibletitletothoseincludedintheregister.Thesystemwasformulatedtocombatthe

problemsofuncertainty,complexityandcostassociatedwitholdsystemtitle,whichdependedonproofofan

unbrokenchainoftitlebacktoagoodrootoftitle.


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with respect to leasing, but it still requires the First Nation to meet the designation ratificationthreshold of the Indian Act. If there is an opportunity to put a legislative package together whichdeals with on reserve regulatory barriers, then the topic of alternative ratification procedures forsurrenders and designations is one which should be considered for inclusion.

Going one step further, delegations of Indian Act land management authority to First Nations is

authorized under Sections 53 and/or 60 of the Indian Act, under which:

53. (1) The Minister or a person appointed by the Minister for the purpose may, inaccordance with this Act and the terms of the absolute or surrender or designation, asthe case may be,

(a) manage or sell absolutely or surrendered lands; or(b) manage, lease or carry out any other transaction affecting designated lands.

60. (1) The Governor in Council may at the request of a band grant to the band the rightto exercise such control and management over lands in the reserve occupied by theband as the Governor in Council considers desirable.

.

First, Section 53 still requires the surrender/designation. Second, since Section 2 (3) (a) of theIndian Act reads: a power conferred on a band shall be deemed not to be exercised unless it isexercised pursuant to the consent of a majority of the electors of the band. This creates thesame hurdle for Section 60 delegations as is the case for surrenders and designationsdiscussed above. This is significant since The transfer of control over land management to FirstNations is part of an overall departmental approach to facilitating assumption by First Nations ofcontrol over their communities. The departments program is made up of four separatecomponents:

a) Regional Lands Administration Program (RLAP);b) Delegated Lands Management Program (53/60);c) First Nation Land Management Act (FNLMA); and,

d) Full Self-Government.20

The end result being that the ratification hurdle rate for the first two steps in this governancecontinuum is in fact as high as or higher than for the last two.

Currently, of 615 First Nations:36 are in lands training and development;

114 operate administratively under RLAP or RLEMP;13 have 53/60 delegated authority;22 operate outside the Indian Act under FNLMA; and,22 operate under comprehensive self-government agreements,

for a total of 207. This leaves 408 First Nations not on the governance continuum/not receiving

any land management funding and less than 10% of all reserve based bands exercising anyform of delegated or self government authority over their lands.

Clearly there are compelling reasons to consider legislative opportunities to either amend theIndian Act in this area, or provide some other legislative option for First Nations to use in lieu of

20INACLandsManagementManual(notyetupdatedtoreflectoverlapswiththenewerReserveLandand

EnvironmentProgramRLEMP)


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the Indian Act (perhaps something like the Claim Settlement legislation which defines a pre-reserve designation as meeting the Indian Act designation requirement).

4. Environmental Management

It is clear from the discussion of title that there is something unique about reserve lands. Title

may be vested with her Majesty but that title is fettered unlike the situation of other Crownland. Amazingly, in the midst of this, Canadas environmental laws treat reserve land much thesame as federal land and treat DIAND as the responsible agency for the land in the same way ittreats DND or any other Department with land holdings and responsibilities, ignoring that thereare communities with governments on those lands,21 where the range of municipal services andcommercial and industrial activities on reserve mirrors that found off reserve, only on a muchsmaller scale.

As noted earlier, the total amount of reserve land in Canada is more than doubling, as a resultof specific claims and Treaty Land Entitlement settlements already in place, and the totalpopulation on reserve is growing at a rate at least twice the national average. There is also asignificant increase in the scale and sophistication of development projects being put forward by

First Nations that raises questions concerning how they will be regulated.

Federal environmental laws set national standards and apply on reserve, but do not provide acomprehensive regulatory framework on reserve. Federal environmental laws focus on:

- Project planning and environmental assessment: Canadian Environmental AssessmentAct (CEAA)

- Setting emission standards for specific toxic substances: Canadian EnvironmentalProtection Act (CEPA)

- Pollution prevention: CEPA- Protecting species and their habitat: Species At Risk Act (SARA), Fisheries Act,

Migratory Birds Act

Provinces, on the other hand, have comprehensive regulatory regimes that regulate the full lifecycle of activities including their location, development, operation and decommissioning.Provincial environmental laws focus on the operational and land use aspects of activities -applications, licensing, permitting, setting operational standards, certification, as well asmonitoring, reporting, investigations and corrective actions. The courts have ruled that whileSection 88 of the Indian Act provides for provincial laws of general application to apply onreserve, provincial laws pertaining to the use of land do not, leaving an environmentalregulatory gap on reserve.

In accordance with CEAA, INAC must ensure that an environmental assessment is undertakenfor all projects it approves on reserve. Under the Indian Act, INAC uses a contractual process(permitting or leasing) rather than regulations to manage land use activities on reserve. INAC

only has regulations for mining, timber and waste and, as noted above, these are largely

21Forafullertreatmentsee:FEDERALINITIATIVESAFFECTINGFEDERALLANDS:IMPLICATIONSFORFIRST NATIONS

ANDTHEGOVERNMENTOFCANADA,BACKGROUNDNOTEByDr.PeggyJ.Blair, JohnGrahamandSergeLarose,

InstituteOnGovernance, February11,2003


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ineffective since they are not up to date and the Indian Act does not itself contain adequateauthority in most instances for comprehensive and effective regulations.

Protecting the environment under the Indian Act and its regulations is then difficult, because theIndian Act does not directly address environmental matters. Further, it does not provide for aproper enforcement regime; with:

- the maximum penalty for non-compliance at $1000;- only civil remedies are available when using contract conditions;- there is no authority to search and seize property where violations are known or

suspected; and,- neither INAC or First Nations have the necessary professional capacity and resources to

effectively monitor and enforce environmental protection requirements in the first place.

Section 81 of the Indian Act provides authority for FNs to develop by-laws. There is a limitedscope of by-law authorities and the provisions are generally antiquated. (e.g. beekeeping andpoultry raising as principal authorities), such that First Nations are hampered by the sameproblems as the Federal Government when attempting to use the Indian Act authorities. Inaddition, as noted above, a number of land use activities take place on reserves that aremanaged by First Nations through Certificates of Possession, customary holdings andsubleasing from a band owned company head lease (not to mention buckshee holdings22).

Fortunately, the new RLEMP program has taken a more formal approach to environmentalcapacity building on reserve and the gap for large commercial and industrial activities hasrecently been closed with passage of the First Nations Commercial and Industrial Development

Act (FNCIDA), which provides for incorporation by reference of the complete provincialregulatory system (incl. environment) for any given project on reserve.

However, since 1992, more than 2,500 contaminated sites have been identified on reserve. Onreserve, hydrocarbons are the lead sources, accounting for 60% of all environmental issues.They are emitted into the environment primarily through improper fuel storage and handling,

which in turn is mainly the result of poorly regulated community infrastructure projects and smallto medium size commercial and industrial projects. In addition, approximately 25% of knowncontaminated sites on reserve are derived from waste management activities, such as storageand disposal of solid, liquid and industrial waste. There are Indian Act regulations for wastemanagement on reserve, but they are limited in their influence with a maximum fine of up to$100.00 and/or up to three months imprisonment.

This makes it difficult if not impossible for First Nations to encourage reserve economicdevelopment in an environmentally responsible manner, representing a major regulatory barrier.

A potential strategy for dealing with it could include work with First Nations (FNs) to create afundamentally new approach to environmental management on reserve that is comprehensivein nature, advances First Nations self government interests and modernizes and updates the

current regime.

It would have to recognize that First Nations exercise land management responsibilitiesseparate from that of INACs under the Indian Act and that reserve lands are different from otherfederal lands. It could look at providing First Nations with local environmental law making

22Itisestimatedthatthereareapproximately1500+bucksheeleasesonOkanoganIndianReserveLands,

OkanoganIndianBand,PropertyTaxationPanels,InformationPackage,2007


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capacity (below the scale of FNCIDA) and, finally, it could include a commitment from otherdepartments to develop regulations for and promote capacity development among FNs as in:

- CEAA - no regulations yet under 59(l) to enable FNs to undertake EAs for projects wherethey are making decisions

- Environment Canada (EC) administrative agreements between EC and FNs underCEPA

5. Band Law Making

The Indian Acts Sec. 81 by law authorities are universally accepted as anachronistic andinadequate to support modern community development (ignoring the intrusive aspect of theMinisters disallowance authority). Outside of self government arrangements, variousrecommendations for improvements to band law making authority under the Indian Act have

been made in the past in relation to: the protection, conservation and exploitation of reserve resources not subject to the

surrender provisions of the Indian Act (i.e.: other than oil and gas and minerals) andwithdrawal of the Indian Timber regulations;

the provision of services on behalf of the band, including local works, utilities and wastemanagement;

residential tenancies; regulation of business, zoning and land use; environmental management; and, ticketing, fines, penalties and enforcement,

where the Indian Acts authorities are inadequate or entirely missing. A fairly simple package oflocal law making authorities could complete a package on resource and environmental

management (as noted above) while directly addressing general economic developmentrequirements (local services, rental housing, zoning and regulation of business etc.).

Conclusions Issues and Options

From the preceding discussion, and without prejudice to the discussions between INAC andFirst Nations, it may be possible to draw some tentative conclusions.

I. Substance

First, if First Nations are satisfied with the processes being used and progress being made toimprove ATR process and resourcing issues then the focus of discussions would be on policy

and legislative issues.

Second, focussing on policy, it does not appear that ATRs intended to re-acquire or replacelands that were the subject of a Tribunal decision are a clean fit with any of the existing ATRpolicy categories. This would imply the need to define a unique ATR policy category for them(perhaps as outlined on page 11), subject to the need to agree on a policy respecting quantumand selection area criteria for this category of ATR (as discussed in Annex A).


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Third, if there is to be an ATR policy discussion then, having settled on the above, consultationscould include a range of overlapping policy issues flowing from the last review under the JointInitiative, including:

1. the definition of service area nationally/provincially; and,2. the ability to define reserve types or uses (including economic reserves, the use of

reserves to protect sites in traditional areas etc).

the results of which could also be important for Tribunal ATRs.

Fourth, from the experience in Alberta, Saskatchewan and Manitoba with the ClaimsImplementation (ATR) legislation, there is a range of legislative initiatives that could potentiallybenefit and give priority to Tribunal ATRs as well as others, including:

1. a national version of the current Prairie Claims Implementation Legislation (maintainingessential features incl. optionality etc);

2. inclusion of all categories of ATR, or at least those where the ATR policy is positive,including: claims settlements which include ATR commitments. court orders. reversions of former reserve land. ATRs arising from Claims Tribunal settlements. existing reserves which were never subject to OIC. natural geographic enhancements of the existing reserve land base. returns of unsold surrendered land to the existing reserve land base. normal growth requirements of the reserve community;

3. the ability to have Ministerial rather than GIC approval of Indian Act Sec 35 (Land Takenfor Public Purposes) easements/interests in land to be converted to reserve;

4. a more reasonable ratification procedure for pre-reserve designations reflecting currentlegislative policy;

5. provision for a dispute resolution mechanism (DRM) to provide certainty in situationswhere surface access provisions for pre-existing third party interests are defined afterreserve creation (e.g.: sub surface minerals); and,

6. other housekeeping items such as band/reserve name changes.

Fifth, while other legislative issues may arise in the context of a joint review between INAC andFirst Nations, from the above list it is likely some subjects will warrant fairly intensive analysisand scrutiny, while others may be more straightforward. While ratification procedures (4.) maybe borderline, it is likely the last two items DRM (because of its complexity and provincialimplications) and housekeeping items (because of their potential non-optionality) will requiresignificant analysis and discussion. If there is an interest in these, then work should likely becommissioned early in any consultations to help inform the discussions.

If there was some interest in putting legislation forward in a time frame which would not allow foran adequate assessment of any of the above then the relevant items would have to be excluded

from this package. This would be a more comfortable option to consider if there was to be aseparate regulatory/economic development package being developed on a later time track thatcould serve as an off-ramp for individual items.

In any event, a number of the ATR items referenced above potentially overlap with any potentialpackage targeted at removing or reducing Indian Act regulatory impediments to sustainablereserve economic development. This would be the case for;


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1. provision for a dispute resolution mechanism to provide certainty in situations wheresurface access provisions for pre-existing third party interests are defined after reservecreation (e.g.: sub surface minerals) - an ADR mechanism would apply after reservecreation and might be called for in relation to other land and resource managementdisputes, as part of a process of more general land management improvement; and,

2. a more reasonable ratification procedure for pre-reserve designations reflecting currentlegislative policy - if pre-reserve designations procedures need to be more reasonablethen many would likely note the same applies to post-reserve creation procedures .

Sixth, as a result of these overlaps and/or due to the separate call for work with First Nations onland modernization and regulatory gaps on reserve it may be worth reviewing the range of suchissues which have accumulated over the last number of years which have not yet been thesubject of joint review and/or First Nation led initiatives including:

1. modernized band law making to improve resource and environmental management(FNCIDA for large projects, modern band law making for smaller projects) and to fillother local regulatory gaps in Indian Act law making important to economicdevelopment and housing, including authorities for:

protection, conservation and exploitation of reserve resources not subject to thesurrender provisions of the Indian Act (i.e.: other than oil and gas and minerals)with subsequent withdrawal of the Indian Timber regulations;

provision of services on behalf of the band, including local works, utilities andwaste management;

residential tenancies; regulation of business, zoning and land use; ticketing, fines, penalties and enforcement; and, environmental Management directly or through CEPA delegation,

2. a more reasonable ratification procedure for designations and surrenders (asrecommended for pre-reserve designations); and,

3. potential land management (53/60, leasing, CP issues etc) an

09-10-14 warren johnson paper on addition to reserve inac

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